MIRA  HERSHEY  HALl 


MIRA  HERSHEY  HALL 
LIBRARY 


LOWER  LIVING  COSTS 
IN  CITIES 


The 

National  Municipal  League  Series 

EDITED  BY 

CLINTON  ROGERS  WOODRUFF 

Secretary  of  the  National  Municipal  League 


City  Government  hy  Commission 

Edited  by  CLINTON  ROGERS  WOODRUFF 

The  Regulation  of  Municipal  Utilities 

Edited  by  CLYDE  LYNDON  KING 

The  Initiative,  Referendum  and  Recall 

Edited  by  WILLIAM  BENNETT  MUNRO  . 

The  Social  Center 

By  EDWARD  J.  WARD 

Woman's  Work  in  Municipalities 

By  MARY  RITTER  BEARD 

Lower  Living  Costs  in  Cities 

By  CLYDE  LYNDON  KING 

The  City  Manager 

By  HARRY  AUBREY  TOULMIN,  JR. 
D.    APPLETON     AND    COMPANY 

Publishers  New  York 


NATIONAL    MUNICIPAL    LEAGUE    SERIES 

LOWER  LIVING  COSTS 
IN  CITIES 

A  CONSTRUCTIVE  PROGRAMME 
FOR  URBAN  EFFICIENCY 


BY 


CLYDE  LYNDON  KING,  PH.D. 

ASSISTANT  PROFESSOR  OF  POLITICAL  SCIENCE 
UNIVERSITY  OF  PENNSYLVANIA 


NEW  YORK  AND  LONDON 
D.  APPLETON  AND  COMPANY 

1915 


COPYRIGHT,  1915,  BY 
D.  APPLETON  AND  COMPANY 


PRINTED   IN   THE   UNITED   STATES    OF  AMERICA 


INTRODUCTION 

Few  realize  until  they  come  to  study  the  matter  how 
closely  the  whole  country  is  bound  up  with  the  welfare 
of  the  city.  This  volume  brings  home  to  the  student  of 
municipal  affairs  how  closely  the  whole  country  is  bound 
up  with  the  welfare  of  the  cities,  and,  per  contra,  how  the 
welfare  of  the  cities  is  dependent  upon  the  whole  country. 
There  are  many  who  think  that  a  city  can  live  unto  itself 
alone,  and  that  only  those  who  live  within  the  urban  ter- 
ritory are  concerned  in  its  welfare.  Professor  King  in 
these  pages  brings  out  clearly  and  even  vividly  how  great 
is  the  interdependence  of  the  city  and  the  country. 

Dr.  King  is  qualified  to  speak  with  authority  on  this 
most  important  subject,  for  he  has  given  the  subject  close 
attention  and  study  not  only  in  connection  with  the  prep- 
aration of  this  book  and  his  chairmanship  of  the  National 
Municipal  League's  committee  on  the  relation  of  the  city 
to  its  food  supply,  but  in  connection  with  his  special 
studies  made  for  the  city  of  Philadelphia,  and  particu- 
larly the  question  of  trolley  transportation  from  sur- 
rounding territories  and  municipal  markets.  He  has  done 
his  work  with  great  care  and  thoroughness.  His  statis- 
tics and  data  come  from  source  material,  mainly  govern- 
mental publications.  Where  secondary  sources  are  re- 
ferred to  this  fact  is  noted  in  the  text  or  in  footnotes. 

The  manuscript  of  this  volume  went  to  the  printer  in 
September,  1914,  and  is  therefore  based  on  the  facts  and 
conditions  of  comparatively  normal  times  and  not  upon 
the  abnormal  facts  and  condition  of  war  time.  This  gives 


2088003 


vi  INTRODUCTION 

to  the  book  a  greater  permanent  value  than  if  it  had  been 
the  product  of  the  war  period. 

The  book  assumes  that  society  will  continue  to  proceed 
as  it  ever  has  proceeded,  by  the  experimental  route.  Con- 
sequently it  contains  no  revolutionary  theories  or  pro- 
grams. While  it  offers  a  constructive  program  for  urban 
efficiency,  the  limits  in  that  program  are  those  that  have 
been  sufficiently  tested  in  practice  and  have  proved  their 
worth  and  adaptability.  It  is  a  study  of  the  forces  now 
actively  at  work  to  make  the  American  cities  efficient 
democracies  and  to  give  to  residents  of  American  cities 
ample  opportunities  for  maximum  returns  in  pleasure, 
health,  recreation,  and  wages  at  minimum  expenditures. 

CLINTON  ROGERS  WOODRUFF. 


CONTENTS 

PART    I 
INTRODUCTION 

CHAPTER  PAGE 

I.    THE  TWENTIETH   CENTURY  CITY  I 

II.    LOWER  LIVING  COSTS  IN  CITIES      ...        7 

PART  II 
URBAN  FOOD  COSTS 

III.  FOOD  FOR  THE  CITIES 12 

IV.  THE  COST  OF  FOOD  DISTRIBUTION  16 
V.    FORCES  FIXING  WHOLESALE  PRICES  ...      27 

VI.    THE  MIDDLEMAN 49 

VII.    CONTROLLABLE  ELEMENTS   IN  RETAIL  PRICES      70 
VIII.    A  SHORTER  ROUTE  FROM  PRODUCER  TO  CON- 
SUMER   90 

IX.    AGENCIES  FOR  BETTER  LOCAL  DISTRIBUTION*     .      98 
X.    MUNICIPAL  MARKETS  AND  OTHER  MEANS  OF 

DIRECT  MARKETING no 

XI.     STANDARDIZATION    AND    EFFICIENT    MARKET- 
ING   THROUGH    PRODUCERS'    COOPERATION    140 
XII.    WHAT    CONSUMERS'    COOPERATION    HAS   AC- 
COMPLISHED           158 

XIII.    A  CITY  PROGRAM  FOR  LOWER  FOOD  COSTS      .    173 

vii 


viii  CONTENTS 


PART  III 
OTHER  URBAN  LIVING  COSTS 

CHAPTER  PAGE 

XIV.     PRODUCTIVITY  THROUGH  HEALTH  CONSERVA- 
TION      182 

XV.    VITALITY  THROUGH  RECREATION     .        .        .218 
XVI.    ELEMENTS  IN  A  CONSTRUCTIVE  HOUSING  PRO- 
GRAM      237 

XVII.    EDUCATIONAL    COSTS    VERSUS     EDUCATIONAL 

RESULTS 271 

XVIII.    LOWER  UTILITY  COSTS 305 

XIX.    TAXATION  AND  GOVERNMENTAL  EFFICIENCY  .    336 
INDEX "      .        .        .        .349 


Lower  Living  Costs  in  Cities 


PART    I 
INTRODUCTION 

CHAPTER   I 
THE   TWENTIETH    CENTURY    CITY 

The  nineteenth  century  village  contained  but  few 
stores  and  the  primary  function  of  these  was  to  supply 
to  the  farmer  what  he  could  neither  manufacture  nor 
produce  for  himself.  The  storekeeper  was  himself  a 
farmer  or  an  owner  of  farm  lands.  Every  village 
dweller  clearly  recognized  his  dependence  for  prosperity 
upon  the  agricultural  region  round  about.  Each  urban 
dweller  had  the  same  point  of  view  and  the  same  phi- 
losophy as  to  the  place  and  function  of  government  as 
did  the  farmer.  The  nation  was  essentially  a  nation  of 
farmers. 

As  the  village  grew  to  be  a  town  and  the  town  grew 
to  be  a  city,  there  came  a  significant  change  in  its  popu- 
lation and  activities.  Instead  of  being  merely  a  supply 
station  for  the  farming  population,  it  became  a  manu- 
facturing and  industrial  center.  Now  its  prosperity  de- 
pended not  solely  upon  the  development  of  agriculture 


2  LOWER  LIVING  COSTS  IN  CITIES 

but  rather  upon  the  up-building  of  industries  and  fac- 
tories. The  prosperity  of  the  nineteenth  century  village 
was  based  upon  the  exploitation  of  virgin  agricultural 
resources ;  the  prosperity  of  the  twentieth  century  city  is 
based  upon  the  exploitation  of  men,  women  and  chil- 
dren. The  basis  of  the  prosperity  of  the  nineteenth  cen- 
tury village  was  the  farmer;  the  basis  of  the  prosperity 
of  the  twentieth  century  city  is  the  wage-earner  and  the 
man  of  small  income. 

While  the  cities  were  undergoing  this  significant  revo- 
lution in  their  industrial  life,  there  was  little  accom- 
panying change  in  the  urban  dweller's  philosophy  and 
point  of  view.  The  twentieth  century  American  city 
is  urban  only  in  its  raw  industrialism.  In  community 
spirit  and  in  community  methods,  it  is  still  only  an  over- 
grown farmers'  village.  Governed  with  a  country  point 
of  view,  little  real  effort  has  been  made  to  transform  it 
into  a  self-sufficient,  organic  community. 

The  basic  element  in  this  country  point  of  view  is  the 
assumption  that  it  is  possible  for  the  city  resident  to 
care  for  himself  without  cooperative  action  and  com- 
munity assistance,  to  the  same  extent  that  a  farmer  can 
care  for  himself ;  it  assumes  that  food  supply  and  living 
costs  are  to  be  solved  by  the  urban  dweller  in  the  same 
way  that  they  have  been  solved  by  the  country  dweller. 
The  result  has  been  accumulated  living  costs  and  low- 
ered individual  efficiency.  Practically  no  community 
foresight  or  cooperative  social  action  has  intervened  to 
lower  urban  living  costs  and  but  little  to  ameliorate 
urban  living  conditions. 

Nothing  more  clearly  reveals  the  continuance  of  this 
country  point  of  view  than  does  the  attitude  toward 
taxes  and  municipal  enterprises.  Taxes  are  still  looked 
upon,  all  too  largely,  as  tribute  to  a  relatively  useless 
institution,  of  about  as  little  direct  value  as  was  govern- 


THE  TWENTIETH  CENTURY  CITY  3 

ment  to  the  average  nineteenth  century  farmer.  Under 
the  nineteenth  century  political  philosophy,  govern- 
mental enterprises  were  to  be  kept  at  a  minimum  that 
taxes  might  be  kept  down.  But  in  the  twentieth  century 
city  the  health,  the  prosperity  and  the  well-being  of  the 
individual  are  to  be  measured  by  the  number  of  things 
done  collectively.  The  twentieth  century  urban  dweller 
can  have  a  clean  house  only  by  having  an  efficient  street- 
cleaning  department;  his  best  health  insurance  is  a  com- 
petent health  department;  the  "cellar"  in  his  apart- 
ment is  a  small  refrigerator,  and  hence  he  must  look  to 
community  control  for  food  storage;  he  can  no  longer 
rely  upon  the  honesty  of  a  farmer  friend  to  insure  the 
wholesomeness  of  his  food  supply,  and  hence  he  must 
look  to  the  state  for  adequate  enforcement  of  proper 
food  laws.  For  his  rates  on  light  and  heat  and  transit, 
for  his  recreation,  for  his  food  and  lower  living  costs, 
the  twentieth  century  urban  dweller  must  look  to  co- 
operative action  through  governmental  agencies.  His 
prosperity  and  his  living  costs,  that  is,  are  largely  meas- 
ured by  his  tax  rate  and  the  number  and  character  of 
municipal  enterprises. 

The  urban  problem  is  distinctly  the  great  American 
problem  of  the  day.  According  to  the  census  of  1910, 
of  the  92,000,000  people  in  the  United  States,  one  out 
of  every  ten  (9.2  per  cent,  to  be  exact)  lives  in  the 
three  cities  of  New  .York,  Chicago  and  Philadelphia ; 
one  in  every  four  lives  in  or  within  ten  miles  of  cities 
having  a  population  of  200,000  or  over;  one  in  every 
three  lives  in  some  large  urban  district;  and  one  in 
every  two  (55.1  per  cent.)  lives  in  incorporated  vil- 
lages, towns  and  cities.  We  are  clearly  a  nation  of  city 
dwellers. 

Nor  is  the  city  problem  confined  solely  to  any  limited 
section  of  the  country.  To  be  sure  about  two-thirds  of 


4  LOWER  LIVING  COSTS  IN  CITIES 

our  urban  population,  or  one-half  (47.9  per  cent.)  the 
population  of  the  entire  country,  live  in  the  fourteen 
states  comprised  within  the  New  England,  Middle  At- 
lantic and  East  North  Central  divisions.  Yet  the  sig- 
nificant characteristic  of  population  movements  from 
1900  to  1910  is  the  rapid  growth  of  cities  in  all  the  other 
sections  of  the  United  States.  In  no  state  in  the  Union 
did  the  urban  population  increase  less  than  10  per  cent., 
while  in  nineteen  it  increased  over  50  per  cent.  Of 
these  nineteen  states,  not  one  is  in  the  geographical  di- 
visions above  noted;  more  significant  still,  all  of  them 
are  in  the  Southern,  Middle  and  Pacific  states,  hereto- 
fore thought  to  be  primarily  agricultural  or  mining  sec- 
tions. The  city  problem  is,  therefore,  the  leading 
twentieth  century  problem  in  all  sections  of  the  country. 

Quite  in  contrast  with  this  rapid  growth  in  urban 
population  is  the  slow  growth  or  even  decline  in  rural 
population.  In  six  states,  in  the  last  decade,  the  rural 
population  showed  an  actual  decrease  and  in  twenty-two 
it  increased  less  than  10  per  cent.  In  twenty-seven 
states  the  increase  was  only  from  10  to  30  per  cent.;  in 
five  from  30  to  50  per  cent. ;  while  in  but  eight,  as  con- 
trasted with  nineteen  cities,  was  there  an  increase  of 
50  per  cent,  or  over.  In  all  but  two  states  the  urban 
population  increased  more  rapidly  than  did  the  rural. 
Where  we  are  adding  one  to  our  rural  population,  we 
are  adding  three  to  our  city  population. 

This  increasing  ratio  of  consumers  to  producers  is  the 
first  big  factor  in  urban  living  costs. 

This  large  increment  to  urban  populations  is  inter- 
spersed here  and  there  throughout  the  city  as  chance  and 
custom  dictate.  As  new  problems  arise  they  are  met  by 
the  city's  officials  with  an  eye  to  solving  those  problems 
for  their  administration.  As  conditions  arise  that 
threaten  the  welfare  or  health  of  others  ameliorative 


THE  TWENTIETH  CENTURY  CITY  5 

measures  are  taken.  Rare  indeed  is  the  city  department 
that  plans  constructively  for  the  future ;  and  fewer  still 
are  the  American  cities  that  have  even  a  makeshift  of  a 
plan  for  future  development.  In  other  words,  we  apply, 
through  traditions  and  habit,  the  negative  conceptions  of 
government  characteristic  of  the  nineteenth  century. 
The  constructive,  far-sighted,  social  point  of  view  finds 
only  an  occasional  expression  and  that  a  feeble  one.  The 
result  is  a  city  clapped  hodge-podge  together  with  the 
inevitable  consequence  of  heavier  living  expenses  for  its 
every  resident. 

This  want  of  social  foresight,  as  reflected  in  high  food 
costs,  poor  housing  conditions,  costly  recreation  centers, 
insanitary  conditions,  etc.,  is  the  second  great  factor  in 
urban  living  costs. 

As  the  prosperity  and  wholesomeness  of  the  twentieth 
century  city  depend  primarily  upon  the  economic  inde- 
pendence and  the  civic  outlook  of  the  wage-earner  and 
the  other  workers  in  the  city's  industries,  the  question  as 
to  the  annual  income  of  those  workers  becomes  of  fun- 
damental importance.  In  the  nineteenth  century  all  mem- 
bers of  the  family  over  eight  or  ten  years  of  age  were 
producers;  the  twentieth  century  family  is  essentially  a 
consuming  family.  What  of  the  income  and  earning 
power  of  the  head  of  this  family? 

Something  over  60  per  cent,  of  the  males  sixteen 
years  of  age  and  over  employed  in  manufacturing,  min- 
ing, trade,  transportation  and  a  few  other  occupations 
associated  with  industrial  life,  earn  less  than  $626  per 
annum.  Only  30  per  cent,  receive  from  $626  to  $1,044, 
and  not  over  10  per  cent,  receive  incomes  of  at  least 
$1,000.  Fully  one  half  of  the  adult  urban  workers,  that 
is,  are  rewarded  at  less  than  $626  per  year. 

This  low  average  wage  is  the  third  big  factor  in  the 
living  costs  of  the  twentieth  century  city. 


6  LOWER  LIVING  COSTS  IN  CITIES 

We  have  sought  to  secure  urban  prosperity  primarily 
by  safeguarding  the  interests  of  the  capitalist.  The  ur- 
ban prosperity  of  the  future  will  be  dependent  upon 
paying  equal  heed  to  the  needs,  conveniences  and  living 
costs  of  the  urban  worker.  The  twentieth  century  city 
will  be  both  democratic  and  efficient  when  a  city  philos- 
ophy supplants  a  country  philosophy;  when  the  city  is 
planned  for  economic  and  social  efficiency ;  when  fore- 
sight supplants  chance;  when  collective  action  aids  in- 
dividual effort;  and  when  governmental  activity  is  con- 
ducted in  the  interests  of  the  city's  workers.  And  the 
hopeful  fact  of  the  twentieth  century  is  that  in  every 
American  city  countless  forces  are  functioning  joyfully 
toward  transmuting  these  ideals  into  actualities. 


CHAPTER    II 
LOWER  LIVING  COSTS   IN    CITIES 

Professor  Chapin  found  that  a  family  with  an  income 
of  from  $900  to  $1,000  per  year  spends  at  least  45  per 
cent,  of  its  income  for  food.  It  is,  therefore,  safe  to  say 
that  half  the  workers  upon  whom  the  twentieth  century 
city  depends  for  its  prosperity  spend  half  their  income 
for  food.  Yet  food  costs  are  increasing,  and  subsistence 
pressure  is  ever  becoming  greater.  The  retail  prices  for 
the  following  fifteen  main  food  articles,  representing 
approximately  two-thirds  of  the  expenditure  for  food 
for  the  average  workingman's  family,  on  August  15, 
1912,  showed  an  increase,  as  compared  with  the  average 
price  for  the  ten-year  period  from  1890  to  1899,  of  57 
per  cent.  Sugar  had  increased  6.1  per  cent.;  creamery 
butter,  34  per  cent. ;  milk,  35.2  per  cent. ;  flour,  35.4  per 
cent. ;  potatoes,  46  per  cent. ;  eggs,  47.8  per  cent. ;  lard, 
57.1  per  cent.;  hens,  58.3  per  cent.;  sirloin  steak,  62.7 
per  cent. ;  ham,  smoked,  63.4  per  cent. ;  rib  roast,  63.6 
per  cent.;  corn  meal,  64.4  per  cent.;  round  steak,  86.9 
per  cent. ;  smoked  bacon,  100.3  Per  cent-  J  an<^  pork  chops, 
105.4  per  cent. 

The  American  city  still  thinks  corner-grocery-wise  of 
its  food  supply.  There  has  not  even  been  adequate  com- 
munity action  toward  lowering  costs  to  the  middleman 
and  to  the  retailer  to  the  end  that  ultimately  there  may 
be  lower  costs  to  the  consumer.  In  food  supplies,  as  in 
government,  we  are  applying  a  country  point  of  view  to  a 
twentieth  century  city. 

7 


8  LOWER  LIVING  COSTS  IN  CITIES 

A  case  in  point  is  the  contrast  between  German  cities 
and  American  cities  in  the  extent  to  which  the  former 
have,  through  community  action,  assured  minimum  liv- 
ing costs  and  secured  community  facilities  for  their  citi- 
zens. Quite  in  contrast  to  this,  American  cities  have 
left  transportation  and  terminal  facilities  to  private  con- 
trol and  initiative.  In  other  words,  the  facilities  for 
freight  distribution  and  for  the  care  and  cost  of  trans- 
porting the  American  city's  food  supply  await  solely  the 
impetus  of  dividends  and  the  stimulus  of  the  dollar 
sign.  As  are  profits  and  the  prospects  of  profits,  so  are 
transportation,  terminal  and  market  facilities.  For  in- 
stance, with  rare  exceptions,  our  \vater-front  cities  have 
made  no  effort  to  develop  their  water  frontage.  Though 
tens  of  millions  of  dollars  have  been  spent  by  the  na- 
tional government  in  the  building  of  breakwaters,  canal 
ways  and  locks,  this  expenditure,  through  the  want  of 
proper  urban  control  and  activities,  has  enriched  pri- 
marily the  riparian  owners,  and  has  done  all  too  little 
toward  solving  the  problem  of  economic  distribution. 
Again  to  make  a  contrast  with  cities  of  other  countries, 
the  German  cities  treat  the  means  of  transportation  by 
water  and  rail  as  factors  of  the  greatest  importance. 
Docks  and  harbors  are  owned  by  the  cities  and  are  so 
constructed  as  to  coordinate  freight  distribution  through 
city-owned  railways,  through  state-owned  canals  and 
railroads,  and  through  state-improved  water  routes  and 
highways.  The  point  is  not  that  public  ownership  per  se 
is  better  or  worse  than  private  ownership,  but  that  public 
initiative  must  be  coequal  with  public  needs. 

Nor  are  food  costs  the  only  costs  that  are  rapidly  in- 
creasing to  the  city's  earners.  The  rapid  rise  in  real 
estate  values,  more  specifically  depicted  in  a  later  chapter, 
has  meant  either  higher  rents  for  the  same  accommoda- 
tions, or  the  securing  of  fewer  conveniences  and  neces- 


LOWER  LIVING  COSTS  IN  CITIES  9 

sities  for  the  same  expenditure.  The  very  nature  of 
urban  employment  necessitates  a  greater  expenditure  for 
health  maintenance  and  lower  earning  power  through 
debility.  Growth  in  urban  populations  in  and  of  itself 
means  the  crowding-out  of  open  spaces  and  increases  the 
sum  necessary  to  wholesome  recreation,  a  recreation  that 
is  all  too  artificial  and  unsatisfactory  at  its  best.  Earn- 
ing and  physical  efficiency  necessitate  an  extension  of 
time  in  school,  thus  both  adding  to  family  costs  and  de- 
laying the  day  of  self-support.  With  city  growth  come 
necessarily  increased  expenditures  for  those  services 
furnished  by  public  utilities ;  and  these  increased  expen- 
ditures offer  temptation  to  inflate  capital,  which  still 
further  multiplies  the  expenses  that  must  be  borne  by 
the  urban  dweller. 

Growing  city  populations  offer  the  opportunity  as  well 
as  the  need  for  so  shaping  urban  facilities  and  condi- 
tions that  city  life  may  run  its  day  happily  with  a.  mini- 
mum of  useless  costs  and  a  maximum  of  returns  for 
necessary  expenditures.  For  lower  living  costs  is  but 
another  phrase  for  individual  and  community  efficiency. 
In  the  following  chapters,  therefore,  consideration  is 
given  to  waste  through  the  want  of  cooperation  and  to 
needless  costs  due  to  civic  carelessness  in  planning  for 
the  future.  Through  individual  and  social  negligence, 
building,  health,  educational,  recreational  and  other  ur- 
ban costs  multiply;  through  individual  and  social  vigi- 
lance these  costs  relatively  decrease. 

Living  costs  may  be  lowered  in  effect  either  through 
increasing  the  actual  money  wage  or  increasing  the  pur- 
chasing power  of  existing  wages.  To  both  these  con- 
siderations, therefore,  later  pages  of  this  book  are  de- 
voted. 

The  wage  received  must,  after  all,  be  measured  by  the 
power  to  purchase.  Through  readjustments  in  current 


io  LOWER  LIVING  COSTS  IN  CITIES 

wealth  distribution,  whether  by  labor  unions  or  general 
acceptance  of  the  need  for  a  higher  wage,  or  by  other 
means,  the  earner's  money  wage  may  be  increased,  but 
the  upward  limit  is  reached  when  a  wage  becomes  the 
full  measure  of  what  the  earner  produces.  The  con- 
tinued increase  of  wages  must,  in  the  last  analysis,  await 
an  increased  earning  power.  To  a  greater  productive 
power,  whether  as  a  worker  on  the  farm  or  in  the  city, 
or  whether  through  health  conservation,  wholesome  rec- 
reational facilities,  educational  efficiency  or  other  means, 
the  later  pages  of  this  book  are  therefore  devoted. 

The  increase  of  the  actual  purchasing  power  of  a 
given  wage  is  just  as  important,  nay  more  so,  than  an 
increase  in  the  money  wage.  The  very  contiguity  of 
city  life  means  that  the  many  can  get  results  for  all  at 
far  lower  costs  than  can  individuals  working  singly.  In 
sparsely  settled  regions,  garbage  removal,  transportation, 
water  supply,  buildings,  etc.,  may  be  secured  through 
isolated  individual  effort,  at  a  lower  cost  than  by  cooper- 
ative effort.  But  not  so  in  densely  populated  areas.  Here 
water  supply,  inspection  of  food  supply,  housing  opera- 
tions and  nearly  all  of  the  other  living  essentials  to  urban 
life,  can  be  secured  most  cheaply  through  cooperative 
effort,  expressed  in  governmental  action  and  the  tax  rate. 
Minimum  living  expenses  in  cities  are  secured,  in  many 
essentials,  only  through  community  action. 

It  is  no  easy  task  for  the  twentieth  century  urban 
dweller  to  get  community  action  in  his  own  behalf.  But 
few  of  the  classes  and  agencies  through  which  he  has  to 
work  to  secure  civic  action  for  the  advancement  of  his 
own  interests  are  within  his  immediate  social,  industrial 
or  governmental  control.  He  lives  in  a  tenement  or 
apartment  house,  the  owner  of  which  lives  far  out  in 'the 
suburbs,  too  aloof  from  social  or  community  pressure 
to  afford  reasonable  rents  and  reasonable  accommoda- 


LOWER  LIVING  COSTS  IN  CITIES  11 

tions.  He  secures  his  heat  from  a  central  heating  sta- 
tion over  which  his  city  government  has  not  as  yet  ex- 
tended its  control.  For  his  light,  his  telephone,  and 
similar  public  utilities,  he  pays  some  absentee  capitalist 
goodly  dividends  on  stocks  that  may  represent  little 
more  than  the  city's  future  needs  capitalized.  Not  only 
must  the  urban  dweller  await  the  action  of  absentee  real 
estate  speculators  and  absentee  owners  of  the  city's  utili- 
ties, to  secure  reasonable  living  and  transit  expenses,  but 
even  for  lower  food  distribution  costs  he  must  await  the 
pleasure  and  profit  of  absentee  owners  of  wharves, 
docks,  terminals  and  water  and  railroad  facilities.  And 
when  he  turns  to  the  abatement  of  unnecessary  costs  or 
to  the  improvement  of  services,  he  finds  that  he  must 
act  through  an  absentee  legislator;  for  the  greater  part 
of  the  city's  powers  are  determined  not  by  the  city 
legislative  body,  but  by  the  state  legislature,  over  which 
the  urban  dweller  has  but  scant  influence. 

The  very  difficulty  of  securing,  as  well  as  the  values 
accruing  from,  community  action  therefore  necessitates 
that  its  economies  and  values  be  set  out  all  the  more 
fully  in  the  succeeding  pages. 

Reducing  living  costs  in  cities  becomes  essentially  a 
constructive  program  for  individual  and  urban  efficiency. 


PART    II 
URBAN    FOOD    COSTS 

CHAPTER   III 
FOOD  FOR  THE  CITIES 

The  whole  world  is  now  the  city's  truck  patch.  Food 
for  the  twentieth  century  city  comes  from  every  section 
of  the  globe  by  every  known  type  of  transportation 
agency.  Under  the  stimulation  of  goodly  profits,  no  land 
has  been  so  distant,  no  expense  so  great,  no  product  so 
rare  that  it  has  not  been  at  the  command  of  the  city 
dweller  who  can  pay  the  price. 

None  are  the  cities  and  few  indeed  are  the  villages 
in  the  United  States  where  Florida's  oranges,  Oregon's 
apples,  Boston's  codfish  and  California's  prunes  are  not 
on  sale.  Every  urban  community  now  has  fresh  straw- 
berries from  the  spring  time  of  the  South  in  January  and 
February  to  the  fall  time  of  the  North  in  August  and 
early  September.  As  spring  advances  from  south  to 
north,  the  yield  of  each  season  is  placed  at  the  call  of 
every  urban  citizen. 

In  days  not  half  a  century  gone  if  the  crops  in  "the 
valley"  failed,  there  was  hunger  in  the  village.  To-day 
the  valley's  crop  for  all  the  year — yea,  for  a  succession 
of  years — may  be  wiped  out  and  prices  be  not  materially 
changed  in  the  urban  centers  near-by.  Indeed,  if  all  the 
crops  of  the  state  of  New  York  should  "fail,"  the  dwell- 

12 


FOOD  FOR  THE  CITIES  13 

ers  in  New  York  City  would  probably  not  notice  signifi- 
cant changes  in  food  prices  save,  perchance,  on  fresh 
milk. 

A  city  in  a  desert,  if  it  have  its  own  means  of  creat- 
ing wealth,  may  now  be  apparently  as  independent  and 
prosperous  as  the  city  in  the  wealthiest  of  agricultural 
communities. 

The  first  big  fact  about  the  food  for  the  twentieth  cen- 
tury city  is  the  diversity  of  its  supply. 

This  making  of  the  world  the  city's  garden  patch  and  of 
the  sea  the  city's  harbor  has  had  certain  profound  effects 
upon  the  urban  dweller's  food  supply  and  costs  and  upon 
his  attitudes  thereto. 

First  of  all,  this  world-wide  diversity  in  food  sources 
means  stability  in  supply  and  hence  stability  in  prices. 
The  selling  price  of  wheat  in  Chicago  or  Duluth  is  as 
much  dependent  upon  crop  conditions  in  Argentina  or 
in  India  or  in  Russia  as  in  the  Great  Northwest  itself. 
The  United  States  raised  in  1912  the  tremendous  total 
of  730,267,000  bushels  of  wheat,  but  this  was  but  one 
bushel  out  of  twenty  (19.4  per  cent.)  of  the  world's 
wheat  supply  for  that  year  (3,758,652,000  bushels).  Po- 
tatoes from  Maine  compete  in  price  (after  the  tariff  is 
taken  into  account)  with  those  grown  in  Ireland.  And 
when  the  orchards  of  Oregon  and  Colorado  are  not  com- 
peting with  those  of  Michigan  or  New  York,  apples  of 
the  northland  are  competing  with  the  citrus  fruits  of  the 
southland.  The  people  of  St.  Louis  for  the  same  break- 
fast eat  eggs  from  Texas,  Kansas,  Michigan  and  China. 
And  even  in  Kalamazoo,  California  celery  keeps  down 
the  price  of  celery  locally  grown.  At  the  great  primary 
markets  of  the  world  these  world-wide  crop  conditions 
and  daily  hunger  wants  are  hourly  transmuted  into  food 
prices  for  the  city  dweller. 

This  diversity  in  the  city's  food  supply  means  that  a 


14  LOWER  LIVING  COSTS  IN  CITIES 

city  can  now  be  located  wherever  specialization  warrants 
without  suffering  from  untoward  prices  or  the  countless 
dangers  formerly  inherent  in  distance  from  the  base  of 
supply.  This  diversity  means,  too,  not  only  specializa- 
tion in  cities,  but  specialization  in  farming  countries  as 
well.  The  raising  of  turkeys  can  thus  become  a  leading 
business  of  Tennessee  or  Texas,  while  the  farmer  near 
Boston  can  specialize  on  asparagus,  the  Kansan  on  corn, 
the  Coloradoan  on  beet  sugar.  And,  finally,  diversity  in 
food  supply  means  choice  of  foods  and  consequently  a 
more  satisfying,  even  though  more  costly,  daily  urban 
life. 

But  this  diversity  in  food  supply  has  its  disadvantages 
as  well  as  its  advantages,  disadvantages  which  cities  can 
minimize  though  they  have  thus  far  usually  neglected 
to  do  so.  First  and  foremost  of  these  is  the  tendency  of 
urban  dwellers  to  underestimate  the  dependence  of  the 
city  upon  the  prosperity  and  productivity  of  the  country 
round  about.  When  the  citizens  of  New  York  City  eat 
Kansas  cornmeal  and  Minnesota  wheat,  agricultural 
values  to  that  extent  move  out  of  New  York  State 
into  Kansas  and  Minnesota.  When  Philadelphians  buy 
produce  grown  in  Florida  and  Tennessee,  Pennsylvania 
land  values  to  that  extent  migrate  from  Pennsylvania  to 
those  states.  It  is  a  significant  commentary  on  the  pres- 
ent relations  between  the  city  and  its  surrounding  coun- 
try that  land  values  are,  on  the  average,  higher  in  the 
non-urban  than  in  the  urban  states.  This  is  a  good  thing 
for  the  non-urban  state,  to  be  sure,  but  what  the  city 
manufacturer  and  storekeeper  too  often  forget  is  that, 
when  land  values  go  elsewhere,  purchasers  and  purchas- 
ing power  go  elsewhere,  too.  No  city  is  so  wealthy,  nor 
the  purchasing  power  of  the  rank  and  file  of  its  citizens 
so  ample,  that  it  can  afford  to  be  heedless  of  the  pros- 
perity of  its  near-by  communities ;  nor  heedless  of  the 


FOOD  FOR  THE  CITIES  15 

higher  food  costs  incident  to  higher  distribution  and 
transportation  costs  for  food  grown  at  a  distance. 

The  second  great  disadvantage  that  the  urban  dweller 
is  heir  to,  because  his  city  has  been  so  content  with 
diversified  and  ample,  though  distant,  food  supplies,  is 
the  greater  food  costs  necessarily  resulting  from  these 
heavier  transportation  and  distribution  costs.  The  sim- 
ple fact  is  that,  other  things  being  equal,  the  greater  the 
distance  the  city  is  from  its  base  of  supplies,  the  greater 
will  its  food  costs  be;  and  this  not  because  transporta- 
tion charges  are  higher,  for  that  does  not  follow  of 
necessity,  but  because  the  system  by  which  distant  food 
supplies  are  handled  must  necessarily  be  more  complex 
and  must  require  more  men — who  must  be  paid — and 
more  risks — which  must  be  compensated — than  the 
near-by  supply.  Food  from  distant  sources  must  of 
necessity  run  the  full  gamut  of  middlemen  and  distribu- 
tion costs,  later  described  in  detail,  while  selling  at  home 
can  be  by  a  less  circuitous  route  and  by  methods  less 
expensive.  In  their  enthusiasm  for  national  and  world 
markets,  American  cities  have  built  up  a  marketing  sys- 
tem the  costs  of  which  are  based  on  selling  in  distant 
rather  than  near-by  markets.  American  cities  have,  as 
a  rule,  overlooked  the  wealth  that  lay  at  their  feet — a 
wealth  that  multiplies  with  use,  for  the  greater  the 
amount  of  selling  at  home,  the  greater  the  adaptation  of 
the  farmer's  output  to  the  city's  needs. 

Assuring  minimum  food  costs  in  cities  is  therefore  the 
twofold  problem  of:  (i)  securing  all  the  advantages  of 
world-wide  markets  at  minimum  distribution  costs,  and 
(2)  of  encouraging  productivity  on  near-by  lands  and 
lowering  the  costs  incident  to  the  selling  of  the  output 
of  those  lands  in  near-by  cities. 


CHAPTER   IV 
THE  COST   OF  FOOD  DISTRIBUTION 

The  average  urban  dweller  spends  practically  one-half 
his  income  for  food.  Living  costs,  therefore,  mean  pri- 
marily food  costs.  These  food  costs  are  rapidly  increas- 
ing. The  significance  of  these  increases  to  urban  pros- 
perity can  be  partly  realized  from  the  statement  that 
price  increases  since  1890  add  $1,680,000  to  what  the 
citizens  of  New  York  now  annually  pay  for  sugar ; 
$21,581,933  to  what  they  annually  pay  for  eggs;  $6,- 
900,000  to  what  they  annually  pay  for  potatoes.  New 
York  consumers  now  pay  about  $645,000,000  annually 
for  certain  main  food  products.  If  food  prices  should 
continue  to  increase  in  the  next  decade  at  the  same  rate 
that  they  increased  in  the  last  decade,  New  York  dwell- 
ers in  ten  years  will  have  to  pay  a  billion  dollars  for 
what  they  now  get  for  half  a  million. 

Can  this  tremendous  food  cost  be  reduced?  It  seems 
evident  that  land  values,  raw  materials,  and  the  wages 
of  agricultural  laborers  must  continue  to  increase  in 
price,  as  they  have  since  the  Civil  War.  Production 
costs  must  therefore  increase.  If  food  costs  are  to  be 
reduced,  or  even  maintained  at  their  present  standards, 
there  must  be  a  lowering  in  distribution  costs. 

What  are  the  costs  of  food  distribution  and  to  whom 
do  these  costs  go? 

Two  studies  have  recently  been  made  in  an  attempt 
to  answer  this  question  for  Philadelphia  and  for  New 
York  City  respectively.  The  first  was  made  by  the 

16 


THE  COST  OF  FOOD  DISTRIBUTION  17 

author  to  Mayor  Rudolph  Blankenburg  on  Distribution 
Costs  in  Philadelphia  * ;  the  other,  by  the  Committee  on 
Markets,  Prices  and  Costs,  appointed  by  the  New  York 
State  Food  Investigating  Commission.  The  former  re- 
port was  made  in  October,  the  latter  in  August,  1912. 

The  results  of  the  Philadelphia  investigation  are  sum- 
marized in  the  table  z  on  page  19.  This  table  gives  the 

1  See  Report  to  Mayor  Rudolph  Blankenburg,  entitled  "A  Study 
of  Trolley  Light  Freight   Service  and  Philadelphia  Markets  in 
their  Bearing  on  the  Cost  of  Farm  Produce." 

2  The  first  item  indicated  in  this  table  is  the  price  received  by 
the  average  farmer,  who  sells  to  some  country  buyer  because  his 
sales  are  not  large  enough  to  warrant  his  dealing  directly  with 
commission  men.     The  price  received  by  the  large  farmer  who 
can  sell  direct  to  commission  men  would  be  the  price  received 
by  the  country  buyer.     The  average  farmer  sells  either  to  the 
country   store  man  or,  especially   near  large  urban   centers,  to 
some  traveling  huckster,  who  buys  to  sell  on  the  city  streets,  in 
the  city  markets,  or  to  large  urban  jobbing,  commission  or  retail 
houses.     The  price  received  by  the  farmers  from  these  country 
buyers  was  secured  from  the  price  paid  by  country  stores  and 
from  replies  to  scores  of  letters  sent  out  to  farmers  in  all  direc- 
tions from  Philadelphia.    This  letter  particularly  asked  the  farm- 
ers to  give  prices  on  all  produce  that  they  sold  during  the  weeks 
ending  July  20  and  July  27. 

The  cost  of  freight  given  as  the  second  item  is  an  estimate  on 
transportation  costs  for  distances  of  from  twenty-five  to  fifty 
miles.  This  estimated  freight  rate  is  the  rate  by  trolley,  by 
steam  rail,  by  water,  or  by  wagon.  In  some  instances  the 
freight  charge  was  estimated  from  points  where  the  freight  is 
greatest,  while  in  other  instances  the  minimum  transportation 
charge  is  taken;  all,  however,  are  typical  transportation  costs. 

The  third  item  indicated  in  the  table  is  the  price  received  by 
the  wholesaler  and  was  secured  from  the  daily  reports  of  whole- 
sale prices.  The  fourth  item,  consumers'  prices,  was  based  upon 
price  reports  sent  in  at  the  request  of  the  Director  of  Phila- 
delphia's Department  of  Public  Works  by  the  leading  employees 
in  that  department.  In  most  cases  there  were  a  half-dozen  or 
more  reports  from  each  of  the  wards  of  the  city. 


i8  LOWER  LIVING  COSTS  IN  CITIES 

prices  received  by  the  farmers  for  certain  kinds  of  pro- 
duce shipped  into  Philadelphia  from  the  outlying  coun- 
ties; the  prices  received  by  each  set  of  middlemen;  and 
the  prices  paid  by  the  consumer,  with  the  per  cent,  added 
to  food  costs  in  each  step  of  the  distribution  process. 

From  this  table  it  will  be  seen  that  the  excess  of  the 
price  paid  by  the  consumer  over  the  price  received  by 
the  producer  ranges  from  67  per  cent,  to  266  per  cent., 
the  average  being  136  per  cent.  In  other  words,  the 
farmer  received  $1.00  for  goods  for  which  the  Philadel- 
phia consumer  paid  $2.35.  This  is  the  average  increase 
of  consumers'  over  producers'  prices,  as  the  prices  re- 
ceived by  the  farmer  are  those  received  by  the  average 
farmer  who  does  not  sell  in  large  lots,  and  the  prices 
paid  by  the  consumer  are  the  prices  paid  by  the  average 
consumer  who  buys  in  relatively  small  quantities.  In 
large  part,  too,  it  is  the  increase  in  perishable  goods  at 
"the  height  of  the  season."  The  average  distribution 
costs  for  grains  and  staple  products  are,  of  course,  not 
nearly  so  high. 

Further  analysis  of  this  table  shows  that  the  costs  of 
food  distribution  go  for  the  following  purposes: 

i.  A  professional  huckster  or  country  store  man  buys 
from  the  farmer  and  sells  to  the  wholesaler  or  urban 
jobber.  His  profits  are  probably  small.  As  one  country 
buyer  wrote,  "When  we  are  compelled  to  wholesale,  we 
get  a  very  small  margin."  As  a  rule,  the  country  buyer 
probably  makes  around  10  per  cent,  on  the  price  he  pays 

Every  possible  effort  was  made  to  secure  reports  for  the  same 
grade  of  goods  and  for  the  weeks  ending  July  20  and  July  27. 
The  farmers,  the  purchasers  and  the  employees  of  the  Depart- 
ment of  Public  Works  were  all  asked  to  designate  carefully  the 
grade  of  goods  and  the  exact  date  of  the  sale  or  purchase.  The 
price  indicated  for  any  article  in  the  table  is,  therefore,  the  price 
for  a  given  week. 


THE  COST  OF  FOOD  DISTRIBUTION 


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20  LOWER  LIVING  COSTS  IN  CITIES 

the  farmer,  plus  freight  to  terminal.  Handling  through 
the  country  buyer  increases  the  total  cost  of  the  goods 
from  9  per  cent,  to  25  per  cent.  The  country  store  man, 
to  be  sure,  probably  makes  on  such  staple  articles  as  eggs 
an  even  smaller  percentage  in  order  to  hold  the  trade 
and  custom  of  the  farmer. 

2.  From  i  to  20  per  cent,  of  what  the  farmer  receives 
goes  for  freight  to  the  terminal.     Of  course  this  per- 
centage varies  with  the  perishability  and  quantity  of  the 
goods  and  the  route  of  shipment. 

3.  Then  the  wholesaler  and  jobber  add  their  charges. 
The  above  table  shows  an  increase  through  handling  by 
these  middlemen  of  n  per  cent,  over  the  country  buyer's 
price.     The  New  York  Market  Commission  concludes 
that  "the  total  cost  of  wholesaling  including  profits  is 
about  10  per  cent."    The  rates  of  commission  for  selling 
freight  and  vegetables  range  from  5  to  10  per  cent,  of 
the  gross  proceeds  of  the  sales.     For  selling  grain  and 
livestock   the   basis   is   quantity   rather   than   the   gross 
proceeds. 

4.  Then   for   handling   the  goods   and   selling  them 
to  the  consumer  the  retailer  charges  from  30  to  100  per 
cent,  increase  over  the  wholesaler's  price.     The  above 
table  shows  an  average  increase  due  to  the  retailer  of  45 
per  cent. 

It  is  not  meant,  of  course,  that  all  farmers'  produce 
goes  through  just  these  channels.  For  instance,  in  all 
large  cities,  there  will  be  a  jobber  between  the  whole- 
saler and  the  retailer.  But  it  is  very  clear  that  it  is  this 
method  of  food  distribution  that  fixes  the  price  paid  by 
the  consumer.  It  is  this  roundabout  route  that  the  ma- 
jority of  country  produce  still  takes,  and  hence  deter- 
mines food  distribution  costs. 

That  this  table  is  typical  is  amply  supported  by  evi- 
dence from  all  quarters.  A  table  in  the  above-men- 


THE  COST  OF  FOOD  DISTRIBUTION  21 

tioned  study  by  the  New  York  State  Food  Investigating 
Commission  shows  how  much  is  added  to  the  cost  of 
food  from  the  time  it  lands  at  the  terminal  in  New  York 
City  until  it  arrives  in  the  consumer's  kitchen.  This 
table  reveals  an  increase  from  the  terminal  to  the  con- 
sumer of  17  per  cent,  per  pound  for  creamery  butter 
and  30  per  cent,  for  eggs.  Meat  prices  increased  41  per 
cent.  Fish  prices  increased  from  25  per  cent,  for  blue 
fish  to  85  per  cent,  for  halibut,  160  per  cent,  for  had- 
dock and  180  per  cent,  for  cod.  Canned  goods  increased 
from  34  per  cent,  for  pork  and  beans  to  70  per  cent,  for 
string  beans,  72  per  cent,  for  peas  and  80  per  cent,  for 
a  can  of  corn.  Staple  groceries  increased  per  pound 
from  20  per  cent,  for  flour  to  33  per  cent,  for  sugar  and 
rolled  oats,  to  100  per  cent,  for  rice,  112  per  cent,  for 
tea,  and  1 14  per  cent,  for  codfish.  Fruit  increases  were : 
peaches,  quart,  67  per  cent.;  Baldwin  apples,  pound,  116 
per  cent;  bananas,  135  per  cent;  and  lemons,  122  per 
cent  per  dozen ;  while  vegetables  increased  from  60  per 
cent,  per  pint  box  of  tomatoes  to  100  per  cent,  for  cab- 
bages, carrots  and  beets,  to  150  per  cent,  for  celery. 
There  was  an  average  increase  of  63  per  cent.1 

1  The  products  increasing  25  per  cent,  or  less  were :  frozen 
roasters,  lb.,  24.15;  bread,  lb.,  23.0;  flour,  lb.,  20.0;  salt  mackerel, 
lb.,  23.5;  condensed  milk,  can,  22.7;  creamery  butter,  lb.,  16.9. 
Those  increasing  from  25  per  cent,  to  50  per  cent,  were:  eggs, 
30.0;  pork  and  beans,  can,  34.0;  live  fowls,  lb.,  25.0;  blue  fish, 
25.0;  pork,  lb.,  45.45;  lamb,  lb.,  31.1;  ham,  lb.,  45.45;  bacon,  lb., 
33-33 ;  sugar,  lb.,  33.3 ;  dried  beans,  lb.,  40.0 ;  rolled  oats,  lb.,  33.0 ; 
lard,  lb.,  31.8;  salmon,  can,  49.0;  oranges,  47.0;  whole  milk 
cheese,  lb.,  28.13.  Those  increasing  from  50  per  cent,  to  100  per 
cent,  were:  halibut,  lb.,  85.5;  coffee,  lb.,  51.3;  dried  peas,  lb., 
60.0;  weakfish,  lb.,  61.0;  peas,  can,  72.5;  corn,  can,  81.8;  string 
beans,  can,  69.6;  fresh  milk,  qt.,  71.5;  potatoes,  74.0;  white 
onions,  lb.,  85.0;  fresh  peas,  qt,  91.8;  lettuce,  head,  93.0;  green 
corn,  ear,  66.6;  cabbage,  head,  90.0;  peaches,  qt,  66.6;  beef,  lb., 
52.0;  tomatoes,  pt,  60.0;  macaroni,  lb.,  50.0.  Those  increasing 


22  LOWER  LIVING  COSTS  IN  CITIES 

A  third  recent  study  (1913)  of  significance  in  showing 
distribution  costs  and  where  they  go  is  the  study  made 
by  the  Wisconsin  Board  of  Public  Affairs  on  marketing 
Wisconsin  cheese.  The  milk  goes  from  the  farmer  to 
the  cheese  maker.  The  cheese  maker  gets  from  i^  to 
2  cents  per  pound  for  making  the  cheese  and  selling  it 
to  the  local  Wisconsin  dealer.  This  dealer  sells  it  to  a 
packer  in  some  large  urban  center,  getting  for  his  ser- 
vices from  y$  to  1 1/2  cents  per  pound.  The  railroad 
freights  then  come  in  to  add  from  }4  to  2^2  cents  per 
pound  to  the  cost  of  the  cheese.  The  packer  then  sells 
to  the  wholesale  grocer,  who  makes  from  J4  to  3  cents 
per  pound  for  his  services.  In  the  meantime,  cold  stor- 
age charges  have  added  from  ^  of  a  cent  per  pound  for 
storage  for  a  month  or  less,  to  ^  of  a  cent  per  pound 
for  storage  for  from  three  to  six  months.  The  whole- 
saler sells  to  the  retailer,  who  then  sells  the  same  cheese 
for  which  the  farmer  in  summer  received  9^  cents  per 
pound  for  20  to  23  cents,  and  for  which  the  farmer  in 
winter  received  n  cents  per  pound  for  25  to  30  cents, 
an  average  increase  of  from  210  to  272  per  cent,  for 
distribution  costs  alone. 

A  similar  route  is  taken  by  other  food  products. 
Thus  Kentucky  onions  are  bought  by  the  local  merchant 
who  sells  to  a  Louisville  jobber,  who  sells  to  the  retailer, 
who  sells  to  the  consumer.  Arkansas  apples,  sold  by 
the  farmer  at  $1.50  per  barrel,  have  been  known  to  retail 
in  New  York  City  for  $25  or  more  a  barrel,  while  cauli- 
flower, sold  by  the  farmer  for  one  cent  a  head,  is  re- 
tailed in  New  York  City  for  fifteen  cents  a  head.  A 

100  per  cent,  and  over  were:  fresh  beans,  qt.,  106.2;  carrots, 
bunch,  100.0;  Baldwin  apples,  lb.,  116.2;  bananas,  doz.,  I35-OJ 
lemons,  doz.,  122.0;  cod,  lb.,  180.0;  haddock,  lb.,  160.0;  rice,  lb., 
100.0;  tea,  lb.,  111.87;  dried  codfish,  lb.,  114.2;  celery,  bunch, 
150.0. 


THE  COST  OF  FOOD  DISTRIBUTION  23 

leading  commission  merchant,  an  officer  in  one  of  the 
leading  organizations  of  commission  merchants,  has  re- 
cently (May,  1914)  given  to  the  author  the  following 
statement  as  to  the  enhancement  of  prices  at  each 
handling,  and  the  various  steps  through  which  the  three 
staple  and  relatively  non-perishable  food  products,  ap- 
ples, potatoes  and  onions,  go  in  their  route  from  pro- 
ducer to  consumer.  The  costs  and  the  route  for  one 
barrel  of  New  York  State  apples,  for  which  the  grower 
received  $2.50,  was  handled  by  the  local  dealer  at  a 
profit  of  twenty-five  cents,  who  then  shipped  it  to  a  whole- 
sale receiver  at  a  cost  for  transportation  and  refrigera- 
tion of  thirty-five  cents,  who  in  turn  sold  it  at  a  profit  or 
commission  of  fifteen  cents  to  a  jobber,  the  cartage  to  the 
jobber's  quarters  being  five  cents;  the  jobber  received  a 
profit  of  twenty  cents  for  selling  it  to  the  retailer;  the 
retailer  added  twenty-five  cents  for  cartage  and  delivery 
and  $1.25  for  profit,  selling  the  barrel  to  consumers  at 
$5.00,  100  per  cent,  more  than  the  grower  received. 
For  one  bushel  of  potatoes,  for  which  the  grower  re- 
ceived sixty  cents,  the  profit  of  the  local  dealer  was  four 
cents,  transportation  cost  nine  cents,  the  commission  to 
the  wholesale  receiver  four  cents,  cartage  two  and  one- 
half  cents,  profit  to  jobber  ten  and  one-half  cents,  cart- 
age, delivery  and  profit  to  retailer  thirty  cents,  the  con- 
sumer paying  $1.20 — just  twice  what  the  farmer  re- 
ceived. The  cost  added  by  each  step  in  the  distribu- 
tion costs  of  a  one-hundred-pound  sack  of  Ohio  onions 
was:  price  received  by  farmer,  $1.10;  profit  to  local 
dealer,  ten  cents ;  cost  of  sack,  ten  cents ;  transportation, 
twenty  cents ;  wholesaler's  commission,  ten  cents ;  cart- 
age, five  cents ;  jobber's  profits,  fifteen  cents ;  retailer's 
cartage,  delivery  and  profits,  seventy  cents ;  cost  to  con- 
sumer, $2.50 — an  increase  of  136  per  cent. 
The  Saskatchewan  Grain  Commission  of  Canada  pre- 


LOWER  LIVING  COSTS  IN  CITIES 


COSTS  m  MARKETING  CANADIAN  GRAIN. 


1909 


THE  COUNTRY  ELEVATOR  OWNER 

For  receiving,  weighing,  elevating,  cleaning  (when  possible), 
spouting,  insuring  against  fire,  storing  for  first  15  days,  and 

loading  into  car $17.50 

(For  subsequent  storage  and  insurance,  if  any,  %  cen 
per  bushel  per  month.  No  change.) 

THE  RAILWAY  COMPANY 

For  hauling  from  a  shipping  point  in  Saskatchewan  to  Winni 
peg,  a  distance  of  641  to  1,086  miles,  $96  to  $144  per  1,000 

bushels ;  on  an  average,  say 1 20 .  oo 

For  hauling  from  a  Georgian  Bay  port  or  Port  Colborne  to 

Montreal 42 . 50 

(This  is  a  s-cent  rate,  but  it  includes  elevator  charges  a' 
either  end  of  the  haul;  for  these  services  %  cent  has 
been  deducted.) 

THE  DOMINION  GOVERNMENT 

For  sampling  and  inspecting  at  Winnipeg,  50  cents  per  car 
weighing  at  Fort  William,  30  cents  per  car;  cargo  inspection 
at  Fort  William,  50  cents  per  1,000  bushels;  cargo  weighing 
out  of  Fort  William,  30  cents  per  1,000  bushels 1 . 60 

THE  COMMISSION  MERCHANT 
For  selling  wheat  on  Winnipeg  Grain  Exchange,   I  cent  per 

bushel 10 .  oo 

THE  EXPORTER 
Not  possible  to  determine  exactly;  say 10.00 

THE  TERMINAL  ELEVATOR  OWNER 
For  receiving,  elevating,  cleaning,  spouting,  insurance  against 

fire,  and  storage  for  the  first  15  days 7  •  SO 

THE  BANK 

Interest  and  exchange  on  money  supplied  to  meet  draft  oi 
shipper  or  commission  merchant;  interest  on,  say,  $700  for 
one  month 3  •  SO 

Exchange  on,  say,  $700 

Interest  on  money  supplied  to  exporter  to  finance  the  exporting 
of  the  wheat  on  $1,000,  for,  say,  two  months 

THE  LAKE  STEAMSHIP  COMPANY 

For  carrying  wheat  from  Fort  William  or  Port  Arthur  to 
Georgian  Bay  ports  or  Port  Colborne  (October  or  November 
charter) IO-°° 

THE  TRANSFER  ELEVATOR  COMPANY 
For  elevation  from  vessel  to  cars  at  Georgian  Bay  or  Lake  Erie 

port  and  15  or  30  days'  free  storage  of  export  grain 

For  transfer  from  railway  car  to  ocean  vessel  at  Montreal  and 

20  days'  free  storage 

THE  OCEAN  STEAMSHIP  COMPANY 
For  carrying  wheat  from  Montreal  to  Liverpool,  London,  or 

Glasgow  docks 4O.OO 

(On  the  basis  of  November,  1912;  freight  rates,  May, 
June,  July  and  August  rates  were  higher  in  1913.) 

MARINE  INSURANCE 

Insurance  while  on  Great  Lakes;  average  figure  for  first-  and 

second-class  boats   for   September-November   shipments  of  , 

lower  lake  ports,  70  per  cent,  on  $80 

Insurance  while  on  Atlantic  (first  half  of  November  rate  from 
Montreal),  40  per  cent,  on  |i,ooo 

SUNDRY  CHARGES 

Insurance  against  fire  while  in  eastern  transfer  elevators,  trans- 
fer of  money  from  Europe  to  Canada,  fees  connected  with 
sundry  documents,  certificates,  etc.,  say 10.00 

Total $304.60 


THE  COST  OF  FOOD  DISTRIBUTION  25 

sents  a  table  on  page  24  of  costs  for  marketing  a  car- 
load of  grain  from  the  country  elevator  in  Saskatchewan 
to  European  markets.  This  table  is  of  interest  not  only 
because  it  shows  the  costs  added  at  each  step,  but  also 
because  it  gives  a  clear  idea  of  the  route  exported  food- 
stuffs follow,  and  the  points  where  cost  were  increased 
in  1913  over  those  of  IQO9.1 

The  value  of  the  egg  crop  of  the  United  States  during 
the  year  1910  was  about  $485,000,000  at  wholesale  prices. 
Consumers,  according  to  the  United  States  Department 
of  Agriculture,  in  that  year  paid  from  50  to  100  per  cent, 
more.  This  means  that,  as  a  nation,  we  paid  from 
$254,000,000  to  $485,000,000  during  that  one  year  just 
to  have  our  eggs  alone  taken  from  the  wholesaler  to  the 
consumer.  As  the  farmers  received  the  wholesale  price 
less  the  commission,  freight,  cartage,  insurance,  cold 
storage,  and  similar  costs,  the  distribution  costs  were 
nearer  the  latter  than  the  former  sum.  For  six  billion 
dollars'  worth  of  products  sold  by  farmers,  consumers 
pay  around  thirteen  billion  dollars. 

It  is  difficult  for  the  imagination  to  grasp  the  social 
and  economic  significance  of  these  tremendously  high 
costs  for  food  distribution.  Assuming  that  New  York 
consumers  pay  annually  $645,000,000  for  their  food,  cer- 
tainly no  less  than  $150,000,000  of  this  goes  in  getting 
that  food  from  the  terminal  to  the  consumer's  kitchen. 
Of  the  $146,000,000  paid  annually  by  the  people  of 
New  York  City  for  eggs,  milk,  onions,  and  potatoes, 
less  than  $50,000,000  was  received  by  the  men  who 
raised  the  crops;  $96,000,000  went  for  distribution 
costs. 

At  a  cost  of  fourteen  cents  per  meal  per  person  for 
all  classes  in  Philadelphia,  high  and  low,  rich  and  poor, 
Philadelphia  citizens  are  spending  annually  $225,000,000 

1  Daily  Consular  and  Trade  Reports,  February  16,  1913. 


26  LOWER  LIVING  COSTS  IN  CITIES 

for  food.  Certainly  over  $75,000,000  of  this  goes  into 
cartage,  delivery  costs  and  retailers'  profits. 

Of  the  total  expenditure  made  by  the  American  nation 
for  food,  from  two  to  three  fifths  goes  in  getting  that 
food  from  producer  to  consumer,  and  in  deterioration 
and  decay  due  to  inadequate  facilities  and  improper 
methods  of  marketing. 

The  following  chapters  in  this  section  are  devoted  to 
the  problem  as  to  whether,  and  how,  this  huge  cost  for 
food  distribution  can  be  lowered.  The  problem  can  be 
resolved  into  three  questions: 

1.  Can  a  more  stable  and  reliable  wholesale  price  be 
secured?    To  this  question  Chapters  IV  and  V  are  de- 
voted. 

2.  Can  retail  prices  be  reduced  and  can  certain  abuses 
by  retailers  be  eliminated?     Chapter  VI  discusses  this 
problem. 

3.  Can  distribution  costs  be  lowered?    To  this  ques- 
tion are  devoted  the  remaining  chapters  of  this  section. 


CHAPTER   V 
FORCES  FIXING  WHOLESALE  PRICES 

Of  greater  value  than  bargain  counter  prices  or  sea- 
sonal variation  in  prices  are  a  nation-wide  stability  in 
price  and  a  nation-wide  fluidity  in  the  movement  of  food 
products.  A  sure  and  steady  market,  even  at  a  lower 
wholesale  price,  will,  more  than  any  other  one  factor, 
stimulate  production  and  tend  to  give  a  steady  and  lower 
retail  price  to  consumers. 

The  wholesale  price  of  foodstuffs  is  fixed  by  forces 
over  which  neither  the  farmers  nor  the  middlemen  of 
any  community  or  even  of  any  state  have  any  appre- 
ciable control.  Any  study  of  food  distribution  must, 
therefore,  begin  with  a  survey  of  the  forces,  national 
and  international,  that  make  for  fluidity  and  accelera- 
tion in  wholesale  prices.  What  these  national  and  inter- 
national forces  are,  what  their  economic  effects,  and 
how  they  can  be  made  more  potent  and  wholesome  fac- 
tors in  shaping  consumers'  prices;  the  means  by  which 
wholesale  prices  are  determined;  the  elimination  of  any 
abuses,  actual  or  possible,  in  the  fixing  of  such  prices; 
and  a  study  of  the  means  by  which  maximum  returns 
can  be  given  to  producers  while  giving  steadier  and  lower 
prices  to  consumers — all  are,  therefore,  matters  of  first 
importance. 

The  forces  by  which  wholesale  prices  are  determined 
and  are  kept  practically  uniform  throughout  the  United 
States  and  the  commercial  world  are  fourfold:  first, 
the  comparatively  low  cost  of  interstate  and  oceanic 
transportation;  second,  the  use  of  cold  storage;  third, 

27 


28  LOWER  LIVING  COSTS  IN  CITIES 

the  methods  used  in  arriving  at  market  quotations ;  and, 
fourth,  the  practice  known  as  diversion  of  shipments  or 
selling  in  transit. 

Steam  freight  transportation  of  foodstuffs  is  essen- 
tially in  carload  lots.  The  place  that  freight  transporta- 
tion plays  in  the  mobility  of  distributing  foodstuffs  and 
in  getting  food  products  from  all  states  and  all  parts  of 
the  world  to  places  where  there  is  the  greatest  local  need 
and  demand  for  them  is  revealed  by  the  fact  that  the  re- 
ceipts from  freight  transportation  in  the  United  States 
in  the  year  1913  totaled  $2,198,930,565.  This  grand 
total  is  due  not  to  the  fact  that  the  rate  of  transportation 
on  any  given  product  is  relatively  high,  but  to  the  vast 
amount  of  freight  transported.  A  bushel  of  wheat  may 
be  sent  from  Chicago  to  New  York  by  lake  and  canal  for 
a  little  over  five  cents,  and  by  all  rail  for  but  a  fraction 
over  nine  cents.  Grain  on  the  average  is  carried  from 
220  to  225  miles.  The  rate  for  this  haul  averages  four 
cents  per  bushel.  The  cost  of  carrying  from  Kansas 
City  to  New  York,  a  distance  of  one  thousand  miles, 
enough  wheat  to  make  a  barrel  of  flour,  is  not  over  sixty- 
five  cents.  The  mean  cost  of  getting  grain,  flour  and 
provisions  from  Chicago  by  all  rail  to  seaboard  and 
thence  by  steamer  to  Liverpool  does  not  exceed  nineteen 
cents  per  one  hundred  pounds. 

This  splendid  development  of  interstate  and  trans- 
continental freight  has  had  most  significant  economic 
results.  It  has  made  it  possible  for  New  York  City  to 
get  its  food  on  an  average  of  one  thousand  miles  inland 
on  a  four-day  haul  by  fast  freight.  Food  supplies  of  the 
large  urban  centers  of  the  Middle  Atlantic  and  New 
England  states  can  now  come  from  the  valleys  of  the 
Ohio,  Missouri  and  Mississippi.  The  Middle  West  now 
produces  two-thirds  of  our  food  supply,  while  the  East 
produces  but  7  per  cent,  of  it.  It  has  made  it  possible 


FORCES  FIXING  WHOLESALE  PRICES        29 

for  certain  of  the  Southern  states,  such  as  Georgia,  Ala- 
bama, Mississippi  and  Texas,  to  give  over  their  land 
(65.8  per  cent,  of  it)  to  cotton  raising  rather  than  grow- 
ing food  products,  while,  at  the  same  time,  it  is  also  pos- 
sible, in  recent  years,  for  the  Central  and  Northern  states 
to  get  their  early  supply  of  fruits  and  vegetable  products 
from  the  far  South. 

There  can  thus  be  an  adaptation  of  products  to  pro- 
duction costs.  The  corn  used  in  the  New  England  cities 
can  be  produced  in  the  Middle  West  at  an  average  cost 


ERRATA 

Page  29,  2nd  paragraph,  5th  line, 
reads  75  cents  per  bushel  — 
should  read  75  cents  per  ton. 


early  history,  to  develop  any  local  manufactures.  Ex- 
amples of  similar  kinds  of  freight  abuses  can  be  multi- 
plied. Each  locality  and  each  state  would  still  gain  much 
by  scrutinizing  its  freight  rates  and  freight  service  for 
its  citizens,  for  transportation  rates  and  service  unques- 
tionably have  a  very  great  influence  upon  the  industries 
and  output  of  any  given  community.  And  yet  in  the 
face  of  all  the  abuses  that  have  existed  and  may  still 
exist,  American  railroads  have  perfected  a  freight  ser- 
vice that  has  revolutionized  the  transportation  of  food 
products.  This  freight  service,  more  than  any  other 
one  factor,  has  made  for  equality  of  prices  between  the 


28  LOWER  LIVING  COSTS  IN  CITIES 

the  methods  used  in  arriving  at  market  quotations ;  and, 
fourth,  the  practice  known  as  diversion  of  shipments  or 
selling  in  transit. 

Steam  freight  transportation  of  foodstuffs  is  essen- 
tially in  carload  lots.  The  place  that  freight  transporta- 
tion plays  in  the  mobility  of  distributing  foodstuffs  and 
in  getting  food  products  from  all  states  and  all  parts  of 
the  world  to  places  where  there  is  the  greatest  local  need 
and  demand  for  them  is  revealed  by  the  fact  that  the  re- 
ceipts from  freight  transportation  in  the  United  States 
in  the  year  1913  totaled  $2,198,930,565.  This  grand 


tireucc  try  steamer  TO  Liverpool  does  not  excee^Triineteen 
cents  per  one  hundred  pounds. 

This  splendid  development  of  interstate  and  trans- 
continental freight  has  had  most  significant  economic 
results.  It  has  made  it  possible  for  New  York  City  to 
get  its  food  on  an  average  of  one  thousand  miles  inland 
on  a  four-day  haul  by  fast  freight.  Food  supplies  of  the 
large  urban  centers  of  the  Middle  Atlantic  and  New 
England  states  can  now  come  from  the  valleys  of  the 
Ohio,  Missouri  and  Mississippi.  The  Middle  West  now 
produces  two-thirds  of  our  food  supply,  while  the  East 
produces  but  7  per  cent,  of  it.  It  has  made  it  possible 


29 

for  certain  of  the  Southern  states,  such  as  Georgia,  Ala- 
bama, Mississippi  and  Texas,  to  give  over  their  land 
(65.8  per  cent,  of  it)  to  cotton  raising  rather  than  grow- 
ing food  products,  while,  at  the  same  time,  it  is  also  pos- 
sible, in  recent  years,  for  the  Central  and  Northern  states 
to  get  their  early  supply  of  fruits  and  vegetable  products 
from  the  far  South. 

There  can  thus  be  an  adaptation  of  products  to  pro- 
duction costs.  The  corn  used  in  the  New  England  cities 
can  be  produced  in  the  Middle  West  at  an  average  cost 
of  $6.82  per  acre  instead  of  at  home  at  $16.82  per  acre. 

It  is  not  meant  from  the  above  that  all  commodity  rates 
are  just  and  equitable,  or  that  freight  rate  abuses  do  not 
still  exist.  Rate  experts  have  held,  for  instance,  that 
Philadelphia  citizens  paid  in  1912,  because  of  unfavor- 
able rate  discrimination,  75  cents  per  bushel  more  for 
their  coal  than  was  paid  by  the  citizens  of  other  cities 
for  the  same  coal  carried  over  the  same  tracks  at  exactly 
the  same  expense.  This  would  mean  a  total  extra  cost 
to  Philadelphia  consumers  of  $4,000,000  annually.  As 
has  been  shown  by  Professor  John  B.  Phillips,  of  the 
University  of  Colorado,  the  railroads  through  freight 
discrimination  made  it  impossible  for  Denver,  during  its 
early  history,  to  develop  any  local  manufactures.  Ex- 
amples of  similar  kinds  of  freight  abuses  can  be  multi- 
plied. Each  locality  and  each  state  would  still  gain  much 
by  scrutinizing  its  freight  rates  and  freight  service  for 
its  citizens,  for  transportation  rates  and  service  unques- 
tionably have  a  very  great  influence  upon  the  industries 
and  output  of  any  given  community.  And  yet  in  the 
face  of  all  the  abuses  that  have  existed  and  may  still 
exist,  American  railroads  have  perfected  a  freight  ser- 
vice that  has  revolutionized  the  transportation  of  food 
products.  This  freight  service,  more  than  any  other 
one  factor,  has  made  for  equality  of  prices  between  the 


30  LOWER  LIVING  COSTS  IN  CITIES 

different  geographical  divisions  of  the  United  States,  has 
made  for  stability  in  prices  for  all  sections,  and  for  a 
nation-wide  price  both  for  producers  and  consumers  on 
all  farm  products. 

Of  like  effect  on  stability  and  acceleration  in  whole- 
sale prices  is  the  relatively  low  rate  of  water  transpor- 
tation, and  the  rapid,  though  still  backward,  develop- 
ment of  water  freight  service.  The  relative  cost  of  ship- 
ping freight  by  all  water  has  been  succinctly  stated  by 
Mr.  S.  A.  Thompson  as  follows : 

"Suppose  you  had  a  ton  of  freight  to  ship  and  a  dollar 
to  spend  in  shipping  it.  How  far  will  the  dollar  carry 
the  ton?  By  horse  and  wagon,  a  little  over  4  miles;  by 
English  steam  truck,  20  miles;  by  rail  at  the  average 
rate  for  United  States  railways,  133  miles;  at  the  rate 
of  a  group  of  selected  railways,  200  miles;  in  the  Erie 
Canal,  333  miles ;  on  the  European  canals,  500  miles ;  by 
lake  at  the  average  rate  through  the  'Soo  Canal'  in  1911, 
1,500  miles;  while  at  the  rate  at  which  coal  is  carried 
both  on  the  Great  Lakes  and  on  the  Ohio  and  Missis- 
sippi rivers,  the  ton  of  freight  can  be  shipped  30  miles 
for  a  cent,  300  miles  for  a  dime,  3,000  miles  for  a 
dollar." 

Inter-oceanic  freight  rates  are  cheaper  still.1  This 
low  ocean  freight  rate  and  the  character  of  ocean  freight 
service  make  accessible  to  producer  and  consumer  the 
markets  and  food  supplies  of  the  entire  world.  Our 
coastwise  trade  especially  has  had  significant  results  in 
getting  food  supplies  in  great  quantities  from  the  south- 
ern to  the  northern  states,  and  the  heavier  outputs  of  the 

1  One  hundred  pounds  of  pork  can  be  taken  from  New  York 
City  to  Liverpool  for  about  $.21  (Annual  Statistical  Report  of 
the  New  York  Produce  Exchange,  1912,  p.  129),  and  one  hun- 
dred pounds  of  bacon  can  go  from  New  York  to  Hamburg  for 
from  $.26  to  $.32. 


FORCES  FIXING  WHOLESALE  PRICES        31 

northern  cities  to  the  southern  ports.  This  coastwise 
trade  should  be  particularly  stimulated  by  the  completion 
of  the  Panama  Canal.  The  fish  and  fruit  of  the  Pacific 
Coast  will  then  be  made  available  to  the  cities  of  the  At- 
lantic Coast  and  the  output  of  the  Atlantic  cities  to  the 
purchasers  on  the  Pacific  Coast.  Halibut,  salmon  and 
other  products  could  unquestionably  be  brought  to  Bos- 
ton and  New  York  at  cheaper  rates  by  the  isthmus  than 
by  land  haul  in  refrigerated  cars. 

While  the  world's  population  has  during  the  last  fif- 
teen years  increased  at  the  rate  of  but  I  per  cent,  per 
annum,  the  volume  of  the  world's  commerce  has  during 
that  same  period  increased  at  the  rate  of  4.5  per  cent, 
per  annum.  This  increase  in  the  world's  trade  would, 
of  course,  have  been  impossible  without  the  development 
of  oceanic  freight  service.  A  similar  result  on  the  vol- 
ume of  trade  within  the  United  States  has  been  caused 
in  large  part  through  the  development  of  railway  freight 
service  and  inland  water  transportation.  The  volume  of 
trade  in  the  United  States  has  since  1896  increased  on 
an  average  of  5.3  per  cent,  per  annum  in  the  face  of  an 
increase  in  population  of  but  1.5  per  cent.  Further 
development  will  unquestionably  be  stimulated  by  greater 
freedom  in  water  competition. 

As  potent  as  this  national  and  international  develop- 
ment of  transportation  by  rail  and  by  water  has  been, 
certain  factors  have  inhibited  their  maximum  develop- 
ment and  have  thus  minimized  their  effectiveness  in  get- 
ting nation-wide  and  world-wide  price  stability  and  flu- 
idity in  food  distribution.  The  chief  of  these  factors 
are:  first,  the  relatively  high  cost  of  delivery  to  shipping 
points;  second,  the  throttling  of  water  competition  by 
water  and  rail  companies  or  by  city,  state  and  national 
negligence  in  securing  adequate  wharfage  and  terminal 
facilities ;  and  third,  the  tariff. 


32  LOWER  LIVING  COSTS  IN  CITIES 

One  dollar  in  every  twenty  of  the  total  value  of  the 
twelve  main  products  of  the  United  States  goes  in  haul- 
age from  farm  to  shipping  point.  For  this  purpose  we 
expend  $73,000,000  annually.  For  all  produce,  certainly 
over  $85,000,000  annually  is  spent  merely  to  get  farm 
produce  to  the  shipping  point.  On  the  average  it  costs 
one-tenth  of  the  entire  wholesale  value  of  our  corn  crops 
to  haul  that  corn  to  the  shipping  point.  To  put  these  facts 
another  way,  it  costs  as  much  to  haul  a  ton  of  the  aver- 
age farm  product  one  mile  as  to  send  it  by  steam  rail 
from  300  to  500  or  even  1,000  miles.  The  cost  to  the 
Pennsylvania  farmer  of  hauling  his  produce  to  the  ship- 
ping point  often  amounts  to  more  than  the  total  rail 
transportation  costs  of  the  Kansas  or  Colorado  farmer 
who  sells  in  the  same  market.  Again,  the  average  cost 
of  hauling  produce  from  farms  to  shipping  points  in  the 
United  States,  as  a  whole,  ranges  from  seven  to  forty- 
four  cents,  with  an  average  of  eleven  cents,  per  one  hun- 
dred pounds.  The  mean  rate  on  grain,  flour  and  provi- 
sions through  from  Chicago  to  Liverpool  by  all  rail  to 
seaboard  and  thence  by  steamer  is  nineteen  cents  per  one 
hundred  pounds,  and,  if  brought  by  lake  and  canal  to 
the  seaboard  and  thence  by  steamer  to  Liverpool,  the  rate 
is  not  far  from  fifteen  cents  per  one  hundred  pounds. 
That  is,  it  costs  but  four  cents  per  cwt.  more  to  get  farm 
products  from  Chicago  to  Liverpool  than  it  does  to  get 
them  from  the  farm  to  the  shipping  point.  In  other 
words,  in  fixing  nation-wide  market  quotations  on  farm 
produce,  the  disadvantage  of  the  western  farmer,  be- 
cause of  his  distance  from  the  market,  is  slight  indeed 
so  far  as  cost  of  transportation  from  shipping  point  to 
market  is  concerned. 

These  tremendous  costs,  due  primarily  to  poor  roads, 
mean  to  the  country  as  a  whole  a  far  heavier  loss  than 
merely  the  sum  total  of  all  haulage  costs.  They  mean 


FORCES  FIXING  WHOLESALE  PRICES         33 

that  the  local  output  of  many  communities  can  have  no 
effect  on  national  prices,  for  the  very  adequate  reason 
that  the  first  cost  of  marketing  is  too  great.  These  ex- 
orbitant initial  costs,  that  is,  minimize  the  effects  of  a 
splendid  freight  service  in  securing  stable  prices  to  pro- 
ducers and  to  consumers.  Too  often,  it  must  be  said, 
especially  for  certain  crops  and  at  certain  times  of  the 
year,  the  railroads  themselves  inexcusably  add  to  these 
initial  costs  by  not  providing  adequate  and  proper  ser- 
vice for  less  than  carload  lots,  by  not  providing  a  suffi- 
cient number  of  cars,  and  by  not  giving  to  the  cities 
adequate  terminal  facilities  for  rapid  and  economic 
freight  distribution.  These  defects  lead  to  spoilage, 
to  delays,  to  heavy  losses  in  farmers'  time,  to  deteriora- 
tion in  consumers'  goods.  In  November  of  1912  the 
shortage  of  over  50,000  cars  led  to  just  such  incon- 
veniences, heavy  costs  and  consequent  loss  in  fluidity 
of  prices  and  food  supply,  and  in  higher  prices  to  con- 
sumers. 

It  is  a  matter  of  common  knowledge  that  the  useful- 
ness of  our  internal  waterways  has  been  materially  di- 
minished through  control  by  land  competitors,  through 
"conference"  agreements  between  water  competitors,  and 
because  of  inadequate  wharfage  and  terminal  facilities, 
due  all  too  frequently  to  the  untoward  influence  in  our 
legislative  halls  of  the  big  steam  competitors  and  their 
allied  interests.  Out  of  fifty  of  our  foremost  ports,  only 
two,  New  Orleans  and  San  Francisco,  have  practically 
complete  public  ownership  and  control  of  their  active 
water  frontage;  eight  have  a  small  degree  of  control, 
and  forty  none  at  all.  Out  of  thirty-seven  ports  for 
which  data  are  available  (excluding  New  Orleans  and 
San  Francisco)  only  fourteen  have  any  publicly  owned 
wharves  (about  260  such  wharves  in  all,  many  privately 
controlled  under  long  leases).  The  need  of  better  wharf- 


34  LOWER  LIVING  COSTS  IN  CITIES 

age  facilities  is  further  discussed  in  the  chapter  on  A 
City  Program  for  Lower  Food  Costs. 

We  have  spent  millions  of  national  money  on  our  in- 
ternal highways  and  harbor  improvements.  Much  of 
this  amount  has  been  practically  wasted,  rendered  in- 
effectual in  commercial  effects,  because  there  has  been 
no  adequate  control  and  regulation  of  water  fronts  or 
wharfage  facilities,  or,  if  such  control  exist,  that  control 
has  been  too  largely  influenced  in  the  interests  of  the 
land  competitors  themselves.  Water  competition  is 
needed  as  a  corrective  of  land  rates  and  services.  Water 
freight  service  is  needed  also  to  give  the  food  products 
of  regions  tapped  by  water  lines  every  available  access 
to  markets  to  the  end  that  the  food  output  of  every 
section  may  have  its  due  effect  on  national  supply  and 
national  prices,  and  to  the  end  that  the  food  products 
of  the  entire  nation,  and  indeed  of  the  entire  world, 
may  respond  to  the  wants  and  needs  of  the  consumers 
in  every  section  of  the  United  States.  Of  deep  import 
to  future  water  competition  is  the  recent  far-sighted 
action  of  the  Interstate  Commerce  Commission  in  plac- 
ing under  its  own  supervision  the  wharves  and  the  tracks 
leading  thereto  owned  by  rail  carriers  engaged  in  inter- 
state commerce,  and  used  in  receiving  and  delivering 
property  moving  by  railroad  in  interstate  and  foreign 
commerce.  Such  regulation  should  lead  ultimately  to 
improved  water  service.  It  must  be  supplemented  by 
national,  state  and  city  action. 

The  Committee  on  the  Merchant  Marine  and  Fisheries 
of  the  national  House  of  Representatives,  after  an  ex- 
tensive and  thorough  investigation,1  concluded  that: 

1  Volumes  1-4  "Proceedings  of  the  Committee  on  the  Merchant 
Marine  and  Fisheries  in  the  Investigation  of  Shipping  Combina- 
tions under  House  Resolution  587."  Eighty  such  agreements  or 
understandings,  involving  practically  all  the  regular  steamship 


FORCES  FIXING  WHOLESALE  PRICES         35 

"The  almost  universal  practice  for  steamship  lines  en- 
gaging in  the  American  foreign  trade  is  to  operate,  both 
on  the  inbound  and  outbound  voyages,  under  the  terms 
of  written  agreements,  conference  arrangements  or  gen- 
tlemen's understandings,  which  have  for  their  principal 
purpose  the  regulation  of  competition  through  either  (i) 
the  fixing  or  regulation  of  rates,  (2)  the  apportionment 
of  traffic  by  allotting  the  ports  of  sailing,  restricting  the 
number  of  sailings,  or  limiting  the  volume  of  freight 
which  certain  lines  may  carry,  (3)  the  pooling  of  earn- 
ings from  all  or  a  portion  of  the  traffic,  or  (4)  meeting 
the  competition  of  non-conference  lines." 

In  view  of  these  facts,  the  Committee  recommended  in 
substance:  (i)  That  the  jurisdiction  of  the  Interstate 
Commerce  Commission  be  extended  to  the  interstate 
port-to-port  traffic  of  domestic  water  carriers,  with  full 
power  to  require  all  such  carriers  to  file  their  port-to- 
port  rates  and  to  submit  reports  of  their  financial  and 
business  operations.  As  regards  interstate  port-to-port 
traffic  the  Commission  should  be  given  full  power  to 
regulate  rates  and  to  determine  maximum  charges.  (2) 
That  water  carriers  be  required  to  file  for  approval  with 
the  Interstate  Commerce  Commission  all  agreements  or 
arrangements  affecting  interstate  transportation,  whether 
written  or  oral.  (3)  That  the  carriers  be  prohibited 
from  granting  rebates  of  any  kind  to  shippers  and  from 
discriminating'  between  shippers  in  rates,  in  the  giving 
of  space  accommodations  and  other  facilities,  and  in  the 
making  of  unfair  contracts  based  on  the  volume  of 
freight  offered.  (4)  That  the  railroads  be  prohibited 
from  making  the  through  rail-and-water  route  unprofi- 
table as  compared  with  the  all-rail  route  by  charging 
more  for  the  same  service  on  water-borne  commodities 

lines  operating  on  nearly  every  American  foreign  trade  route, 
are  described  in  the  foregoing  report. 


36  LOWER  LIVING  COSTS  IN  CITIES 

than  they  charge  for  the  proportionate  share  of  the  all- 
rail  haul.  (5)  That  railroads  be  required  to  make  their 
terminal  facilities  available  to  water  carriers  on  equal 
terms  and  under  such  reasonable  conditions  as  the  Inter- 
state Commerce  Commission  may  prescribe.  (6)  That 
there  should  be  legislation  providing  for  equal  treatment 
to  all  shippers  and  water  carriers  by  transfer  and  light- 
erage concerns  when  forming  a  link  in  interstate  or  for- 
eign commerce. 

The  tariff  is  the  third  factor  of  special  significance  in 
preventing  the  transportation  service  above  described, 
especially  oceanic  freight,  from  having  its  whole  effect 
on  stable  prices  in  food  supplies.  Nothing  could  be  more 
ludicrous  than  the  statement  made  by  a  national  party 
in  its  recent  platform  that  the  tariff  has  no  effect  on 
prices.  One  purpose  of  the  tariff  is  to  raise  prices.  Its 
effectiveness  hinges  solely  upon  the  extent  to  which  prices 
are  made  and  kept  higher.  There  may  be  and  no  doubt 
are  sound  arguments  for  the  tariff,  but  lower  living  costs 
is  not  one  of  them.  No  principle  as  to  just  what  extent 
the  tariff  raises  living  costs  through  inhibiting  free  na- 
tional and  international  exchange  of  products  can  be 
stated,  as  the  effect  of  any  given  schedule  will  depend 
on  numerous  other  factors.  However,  the  upward  limit 
to  which  the  tariff  can  force  prices  is  evident :  it  is  the 
cost  abroad  plus  transportation,  insurance,  cartage  and 
similar  costs;  and,  of  even  greater  psychic  influence,  to 
these  costs  must  be  added  the  power  of  the  American 
concern  to  freeze  out  foreign  competitors  by  threatening 
or  merely  having  potential  power  to  lower  prices  when- 
ever such  foreign  products  are  shipped  to  dome.stic  mar- 
kets. 

A  few  examples  of  the  effects  of  the  tariff  on  living 
costs  must  here  suffice.  Congressman  Andrew  J.  Peters 
of  Massachusetts  has  recently  prepared  a  table  to  show 


FORCES  FIXING  WHOLESALE  PRICES          37 

that  the  former  tariff  on  sugar  meant  an  annual  increase 
of  over  $140,000,000  in  consumers'  prices.  Of  this 
amount  but  $52,000,000  went  into  the  federal  treasury. 
A  30  per  cent,  tax  on  sewing  machines  put  into  the  fed- 
eral treasury  but  $23,000  annually  or  less  than  one-third 
of  one  per  cent,  of  the  value  of  the  sewing  machines  our 
manufacturers  exported,  and  yet  this  tax  causes  every 
purchaser  to  pay  30  per  cent,  more  for  his  machine. 
During  the  three  months  ending  March  31,  1912,  the 
United  States  imported  $3,419,065  worth  of  potatoes 
from  foreign  countries,  on  which  there  was  a  tariff  of 
twenty-five  cents  per  bushel — a  total  levy  on  the  con- 
sumers of  $1,666,007.50.  This  represented  but  slightly 
the  total  increased  costs  paid  by  American  consumers 
for  their  potatoes,  because  the  tariff  of  twenty-five  cents 
a  bushel  practically  inhibited  competition  from  abroad 
and  thus  caused  practically  a  twenty-five-cent  increase  on 
every  bushel  of  potatoes  consumed  in  the  United  States 
during  a  possible  importing  period.  At  the  clamorous 
demand  of  German  housewives,  the  German  government 
reduced  its  prohibitive  import  duties  on  meat  by  over 
one-half  and  the  inland  railroad  charges  one-third. 

The  tariff  inhibits  free  international  exchange  of  goods 
and  thereby,  by  causing  a  greater  dependence  upon  the 
chance  output  or  productiveness  of  a  given  section  of 
the  United  States,  makes  for  instability  in  American 
wholesale  prices  with  consequent  higher  average  prices 
to  American  consumers.  In  other  words,  the  American 
consumer  is  now  paying  many  times  over  the  subsidy 
granted  to  manufacturers  and  producers  through  the 
tariff. 

Cold  storage,  the  modern  method  of  arresting  food 
spoilage  and  preserving  foods,  is  the  second  factor  that 
makes  for  uniformity  in  wholesale  prices  and  reliability 
in  food  supply.  Cold  storage  has  been  used  to  a  sufn- 


38  LOWER  LIVING  COSTS  IN  CITIES 

cient  extent  to  exert  an  influence  on  prices  only  from 
about  1893,  but  within  the  last  dozen  years  it  has  come 
to  be  a  factor  of  first  importance  in  food  distribution, 
food  supply  and  food  costs. 

The  best  figures  obtainable  indicate  that  there  are  be- 
tween seven  hundred  and  eight  hundred  cold  storage 
warehouses  in  this  country,  with  an  aggregate  capacity 
of  approximately  200,000,000  cubic  feet  of  space.  In 
addition  to  this,  there  are  2,000  or  more  private  ware- 
houses. Through  the  public  warehouses  there  pass  an- 
nually about  1,320,000  carloads  of  perishable  products, 
valued  approximately  at  $600,000,000.  This  is  exclusive 
of  the  16,000,000  pounds  of  fresh  meat  which  are  refrig- 
erated in  packing  houses  and  public  markets.  Such 
figures  give  some  notion  as  to  the  extensive  use  and  vital 
significance  of  cold  storage  and  the  amount  of  capital 
and  effort  put  into  the  cold  storage  business. 

A  modern  warehouse  is  of  concrete  construction,  with 
cork  or  mineral  wool  insulation,  and,  as  has  been  pointed 
out  by  Dr.  M.  E.  Pennington,  "is  far  cleaner  than  the 
butcher's  ice-cooled  box,  and  infinitely  ahead  of  the  house 
refrigerator  as  commonly  kept  by  the  present-day  serv- 
ant." Refrigeration  is  produced,  not  by  ice,  as  is  com- 
monly supposed,  but  by  mechanical  means,  and  is  dis- 
tributed by  pipes  carrying  calcium  chloride  brine  or 
liquid  ammonia  which  may  be  —  20°  F.  The  temperature 
usually  maintained  must  range  from  about  40°  F.  in  the 
case  of  soft  vegetables  to  29  to  50°  F.  for  eggs,  10°  F.  for 
poultry  and  meat,  and  —  10°  F.  for  butter  and  sometimes 
fish.  Not  only  are  the  products  usually  thought  of  as 
perishable  preserved  by  cold  storage,  but  refrigeration 
is  also  used  to  preserve  cereals,  nuts  and  similar  food 
from  weevil  and  other  vermin. 

Cold  storage  charges  seem  not  to  be  excessive.  The 
relatively  large  number  of  private  warehouses,  together 


FORCES  FIXING  WHOLESALE  PRICES 


39 


with  the  relative  ease  and  low  expense  with  which  ware- 
houses can  be  conducted,  and  their  great  convenience  to 
their  owners,  have  all  tended  to  keep  cold  storage  charges 
down  to  a  point  where  the  maximum  usefulness  and 
economic  results  of  food  preservation  through  refrig- 
eration are  consistently  obtained.  This  fact  can  be  il- 
lustrated by  a  few  typical  cold  storage  charges.  The  cost 
of  storing  cheese  ranges  from  one-eighth  of  a  cent  for 
four  months  or  less  to  three-eighths  of  a  cent  for  three  to 
six  months.  The  total  cost  of  carrying  eggs  in  storage  over 
the  ten  months  from  April  to  January,  including  not  only 
the  storage  charge  but  also  the  interest  on  the  investment 
and  the  cost  of  insurance,  is  from  two  to  two  and  one- 
half  cents  per  dozen.  The  Committee  on  Markets,  Prices 
and  Costs  of  the  New  York  State  Food  Investigating 
Commission  has  revealed  in  detail  in  the  appended  table  * 
that  the  total  increase  due  to  cold  storage  for  six  months 
for  the  products  indicated,  including  insurance  .416  and 
interest  at  6  per  cent,  ranges  from  $.007  to  $.582. 

The  proper  use  of  refrigeration  will  prevent  waste 
and  decay  and  thus  make  extensive  savings  which  must 
ultimately  be  reflected  in  lower  consumers'  prices.  About 

1  ANALYSIS  OF  STORAGE  CHARGES  ON  FOOD  PRODUCTS  AT  HYPOTHETICAL  COST 
PRICES  IN  NEW  YORK  CITY 


COMMODITY 

Hypothet- 
ical Cost 
Price 

Storage 
Charge 
for  6  mos. 

Insurance 
at  .416 
for  6  mos. 

Interest  at 
6  per  cent, 
for  6  mos. 

Total 
Storage 
Charge 

Increase 
in  Cost 
Due  to 
Storage 

Butter  

.25  Ib. 

OI 

000725 

.0075 

.268225 

.018 

Poultry  

.18 

.01 

.000522 

.0054 

•  195922 

.016 

Eggs  ... 

0089 

.00059 

.006 

.21549 

.016 

.15  Ib. 

.006 

.000435 

.0045 

.  16095 

.on 

Dried  fruit  
Nuts  in  shell  .... 
Nuts  shelled  .... 
Green  fruit  

.  10  Ib. 
.  15  Ib. 
.3olb. 
2.sobbl. 

.00333 
.0075 
.005 
•  So 

.  00029 
.  000435 
.00087 
.00725 

.003 
.0045 
.009 
.075 

.  106623 
.  162435 
.31487 
3.0825 

.007 
.012 
.015 
.582 

N.  B.— Storage  charge  on  six  months'  basis,  New  York  rates.  Insurance 
charge  on  six  months'  basis.  Beach  Street  rates,  .416.  Interest  charge  on  six 
months'  basis,  6  per  cent. 

Report  of  the  Commission  on  Markets,  Prices  and  Costs,  p.  42. 


40  LOWER  LIVING  COSTS  IN  CITIES 

8  per  cent,  of  our  total  egg  production  now  goes  to  the 
dump  each  year  for  the  want  of  proper  handling  and 
refrigeration,  while  the  loss  on  both  poultry  and  eggs 
totals  $75,000,000  annually.  Most  if  not  all  of  this  loss 
could  be  avoided  through  proper  handling  and  refrigera- 
tion. Of  the  8  per  cent,  loss  in  eggs,  5  per  cent.  (4.86 
per  cent.)  occurs  between  the  farm  and  the  market,  and 
only  3  per  cent.  (3.48  per  cent.)  occurs  after  the  goods 
reach  the  market  center.  This  waste  in  the  egg  supply 
is  occasioned  in  the  first  place  by  improper  gathering  of 
eggs  on  the  farm.  Out  of  a  certain  number  of  eggs, 
marketed  in  a  given  time  and  a  given  year  by  a  typical 
farmer,  only  25  per  cent,  were  found  to  be  firsts,  while, 
due  to  long  holding,  60  per  cent,  were  seconds.  In  the 
second  place,  there  is  loss  due  to  a  long  wait  at  the  sta- 
tion without  refrigeration,  and  then  by  being  taken  by 
a  slow,  hot  pick-up  freight  car  to  the  packer.  This  loss 
could  be  eliminated  entirely  by  prompt  and  proper 
gathering  of  eggs  on  the  farm,  proper  refrigeration  of 
the  pick-up  freight  car,  and  shipment  -via  refrigerated 
warehouses,  chilled  rooms  at  the  jobbers  and  commission 
houses,  to  the  cold  storage  vaults  of  the  retailers  and  the 
ice-boxes  of  the  consumer. 

During  the  year  1911  the  city  of  New  York  condemned 
in  its  markets  72,785  pounds  of  eggs,  350,755  pounds  of 
fish  and  200,000  pounds  of  poultry.  During  the  year 
1912  the  pure  food  inspectors  of  Massachusetts  found 
it  necessary  to  condemn  but  300  pounds  out  of  a  total 
of  43,000,000  pounds  of  perishable  produce  stored  in  the 
refrigerated  warehouses  of  the  state.  These  figures 
serve  as  significant  indices  of  the  relative  amounts  of 
food  loss  through  no  refrigeration  as  compared  with 
cold  storage.  Significant  national  economies  can  unques- 
tionably be  effected  through  the  extended  use  of  food 
conservation  by  cold  storage. 


FORCES  FIXING  WHOLESALE  PRICES         41 

Cold  storage  moreover  equalizes  the  supply  and  puts 
the  output  of  each  season  and  each  section  of  the  coun- 
try and  indeed  of  the  world  at  the  disposal  of  each  and 
every  section  of  the  United  States.  Thus  only  through 
preservation  by  cold  storage  can  we  have  seasonable 
poultry  throughout  the  year.  Dr.  Mary  E.  Pennington, 
the  nation's  leading  expert  on  the  chemical  and  bacterial 
changes  occurring  during  cold  storage,  has  shown  that 
the  chemical  changes  in  poultry  kept  hard  frozen  at  10° 
F.  for  twelve  months  are  less,  and  that  such  poultry  is, 
therefore,  more  wholesome  than  is  poultry  kept  for  five 
and  one-half  days  at  the  temperature  of  the  average 
house  ice-box,  that  is,  50°  to  55°  F.  The  average  season 
for  broilers  throughout  the  United  States  is  from  late 
May  to  August  and  for  roasters  from  September  to  De- 
cember. Through  cold  storage  only  can  we  have  good 
broilers  and  roasters  throughout  the  year.  Through  cold 
storage  only  can  we  have  turkeys  after  the  middle  of 
January. 

Cold  storage  not  only  preserves  the  seasonal  output 
of  each  section  of  the  country,  for  use  at  any  time 
throughout  the  year,  but  it  also  makes  the  output  of  each 
section  at  once  available  to  all  sections  of  the  country. 
Each  section  of  the  country  can  with  cold  storage  adapt 
itself  to  those  products  and  industries  in  which  there  is 
the  greatest  profit  under  a  national  supply  and  demand. 
Cold  storage  thus  makes  it  possible  for  each  community 
to  specialize  in  the  produce  which  it  can  most  economi- 
cally produce.  Cold  storage  gives  to  food  produce  a  na- 
tional market  independent  of  local  supply  and  demand. 

Formerly  the  weather  and  the  near-by  village  demand 
set  the  price  and  put  the  limits  to  the  amount  of  Wiscon- 
sin cheese  produced;  with  cold  storage  the  markets  for 
Wisconsin  cheese  are  national  and  prices  stable  through 
the  year.  Through  cold  storage  early  vegetables  are  now 


42  LOWER  LIVING  COSTS  IN  CITIES 

produced  in  the  South  to  be  sent  to  consumers  every- 
where and  the  cars  that  convey  meats  southward  return 
laden  with  fruit  and  truck.  To  cold  storage  largely  is 
attributable  the  fact  that  Florida's  rural  population  in- 
creased from  1900  to  1910  three  times  as  fast  as  the 
average  increase  of  rural  population  in  the  United  States. 
The  effect  of  this  extended  use  of  cold  storage  is 
nation-wide  stability  in  wholesale  prices  and  nation-wide 
reliability  on  ample  supplies  of  all  foods  that  can  be 
preserved  through  refrigeration.  With  cold  storage,  but- 
ter can  be  kept  wholesome  for  a  period  of  twelve  months. 
The  season  of  flush  supply  for  butter  is  June,  July  and 
August;  the  season  of  short  supply,  November,  Decem- 
ber and  January.  During  the  decade  of  1880-90  the 
wholesale  price  of  butter  in  the  New  York  market 
ranged  from  20^2  cents  during  the  flush  months  to  33^ 
cents  during  the  scarcest  months;  during  the  decade 
1900-10,  under  cold  storage,  the  prices  for  these  two 
periods  were  respectively  22*4  cents  and  25^  cents  for 
finest  cold  storage  butter,  and  27^4  cents  for  fresh  butter.1 
During  the  decade  of  1880  to  1890  eggs  ranged  in  price 
from  15^4  cents  during  the  period  of  flush  supply  to 
26^4  cents  during  the  period  of  scarce  supply;  in  the 
decade  from  1900  to  1910,  prices  ranged  for  these  periods 
respectively  from  17^4  cents  to  21^  cents  for  cold  stor- 
age eggs  and  2934  cents  for  fresh  eggs.  A  comparison 
of  the  prices  of  both  poultry  and  eggs  during  the  periods 

1  Primarily  because  of  the  cooler  weather  and  because  of  the 
better  condition  in  which  the  egg  reaches  the  market,  eggs  stored 
during  the  earlier  spring  months,  especially  during  April,  can  be 
preserved  for  use  the  following  January.  "So  far  as  our  knowl- 
edge goes  now,"  says  Dr.  Pennington,  "a  fresh  egg  held  at  a 
temperature  of  between  29°  F.  and  31°  F.  will  be  an  edible, 
wholesome  egg  at  the  end  of  nine  months."  Eggs  laid  later  in 
the  season  must  be  consumed  first,  for  instance,  June  eggs  in 
October. 


FORCES  FIXING  WHOLESALE  PRICES         43 

of  flush  and  scarce  supply  in  the  decade  previous  to  cold 
storage  with  their  prices  in  the  decade  when  cold  storage 
was  used  extensively  indicates  that  cold  storage  has 
meant  higher  prices  for  producers  and  lower  prices  for 
consumers. 

It  is  clear,  however,  that  the  maximum  economic  ef- 
fects of  cold  storage  would  be  curtailed  by  any  law 
placing  an  undue  restriction  upon  the  time  that  produce 
can  be  held  in  cold  storage.  The  time  limit  should  be  de- 
termined by  the  laboratory  and  the  food  expert  and  not 
by  the  arbitrary  acts  of  some  legislator. 

The  third  factor  making  for  fluidity  and  acceleration 
and  thus  for  stability  is  the  method  by  which  crop  re- 
ports are  issued.  It  is  primarily  upon  these  reports 
that  the  produce  exchanges  in  the  primary  markets  of  the 
United  States  base  their  prices,  both  on  current  produc- 
tion and  on  futures. 

Information  as  to  crop  and  harvest  conditions  is  se- 
cured by  the  Bureau  of  Statistics  of  the  United  States 
Department  of  Agriculture,  the  most  highly  organized 
crop-reporting  department  in  the  world.  This  bureau 
has  about  fifty  statisticians  and  clerks  in  the  city  of 
Washington,  fifteen  to  twenty  traveling  reporting  agents 
outside  of  Washington,  a  state  agent  paid  for  part  of 
his  time  in  each  state  of  the  Union,  and  3,000  county 
correspondents  and  30,000  township  and  other  local  cor- 
respondents giving  voluntary  service  as  crop  reporters. 
The  bureau  thus  secures  at  least  four  classes  of  reports 
as  to  acreage,  condition  and  output  of  the  crop  in  each 
section  of  the  country. 

The  reports  by  the  state  agents  and  by  the  special 
traveling  agents  are  sent  directly  to  the  Secretary  of 
Agriculture,  and  deposited  in  a  safe  until  the  crop-re- 
porting board  meets  on  a  stated  crop-reporting  day.  The 
reports  from  county  and  township  correspondents  are 


44  LOWER  LIVING  COSTS  IN  CITIES 

sent  to  the  Statistical  Bureau,  where  they  are  assembled 
and  averaged.  The  summarized  results  are  placed  in 
the  secretary's  safe  until  the  crop-reporting  board  is  in 
session.  On  what  is  known  as  report  day,  the  statistician, 
with  four  assistant  statisticians  and  agents,  receives  the 
four  classes  of  reports  in  a  meeting  behind  closed  doors. 
From  these  four  classes  of  reports  the  board  arrives  at 
state  averages  and  totals,  and  national  averages  and 
totals  as  to  crop  conditions,  including  the  leading  facts 
as  to  acreage  and  condition  of  each  crop  in  each  and 
every  locality.  At  a  stated  hour  this  report  is  sent 
world-wide  by  telegraph  and  telephone.  When  received 
in  the  trading  pits  of  the  primary  markets,  such  as  New 
York,  Chicago  and  New  Orleans,  it  is  instantly  trans- 
muted into  prices. 

To  this  national  crop-reporting  agency  is  now  being 
added  an  international  crop-reporting  agency.  It  is  pro- 
posed that  this  agency  have  headquarters  at  Rome,  in 
the  new  International  Institute  of  Agriculture,  which 
has  already  a  Bureau  of  Agricultural  Statistics  collecting 
world-wide  data  and  supplying  these  facts  to  the  forty- 
nine  adhering  countries.  This  would  make  a  world- 
round  stable  price  for  all  farm  products.  Each  of  the 
great  produce  exchange  concerns  has  also  its  own  crop- 
reporting  agents  at  work,  not  only  in  this  country,  but 
in  all  other  countries  as  well.  Thus  prices  of  farm 
products  are  based  on  crop  conditions,  not  only  in  every 
section  of  the  United  States,  but  in  every  section  of  the 
world. 

In  addition  to  these  reports,  there  is  now  needed  pub- 
licity as  to  the  holdings  in  cold  storage  warehouses. 
These  food  holdings  are  of  as  great  moment  in  fixing 
prices  as  are  crop  conditions.  Without  them  it  is  im- 
possible to  get  at  all  the  resources  of  the  nation. 

This  knowledge  as  to  crop  conditions  of  the  nation  and 


FORCES  FIXING  WHOLESALE  PRICES         45 

of  competing  nations  as  well  takes  a  large  speculative 
element  out  of  price-making  and  therefore  has  a  most 
definite  tendency  to  keep  wholesale  prices  stable  and 
wholesome.  The  function  of  transmuting  this  knowl- 
edge into  prices  is  performed  by  trading  pits.  In  these 
there  are  no  doubt  abuses  that  proper  legislation  and 
publicity  must  eliminate.  Their  importance  also  de- 
mands facilities  and  assistance.  To  both  these  subjects 
attention  is  given  in  the  following  chapter. 

The  fourth  factor  making  for  fluidity  in  wholesale 
prices  and  for  an  equalized  food  supply  is  the  practice 
known  as  diversion  of  shipments  or  selling  in  transit. 
The  progress  of  cars  or  vessels  can  be  reported  by  wire 
and  diverted  from  their  course  at  any  time  by  a  tele- 
gram. Through  this  practice  food  products  from  any 
section  of  the  country  may  be  sent  even  after  transit 
has  started  to  the  point  offering  most  favorable  mar- 
kets. If  a  car  of  cattle,  for  instance,  is  consigned  from 
a  Kansas  shipping  point  to  Chicago,  it  may  by  telegram 
be  placed  on  sale  at  either  Kansas  City  or  Omaha  should 
prices  at  either  of  those  places  indicate  greater  returns 
than  the  probable  price  upon  arrival  at  Chicago.  This 
is  a  common  practice  in  the  livestock  trade.  Grain  billed 
through  from  Nebraska  or  Minnesota  to  points  in  the 
Middle  West  or  to  Atlantic  points  may  be  diverted  on 
almost  any  day  to  any  other  point  in  the  United  States. 
Thus  should  prices  be  higher  for  any  reason  in  Cin- 
cinnati, or  Pittsburgh,  or  Philadelphia,  the  car  would  be 
directed  to  that  point  in  lieu  of  going  on  to  the  point 
to  which  it  had  been  consigned  but  where  local  prices 
were  not  so  high.  The  selling-in-transit  plan  is  used 
in  shipping  fruit  by  rail  from  California  or  other  south- 
ern or  southwestern  points.  A  similar  method  is  used 
in  diverting  trans-oceanic  shipments  to  points  where 
higher  wholesale  prices  may  be  secured.  For  instance, 


46  LOWER  LIVING  COSTS  IN  CITIES 

a  cargo  of  wheat,  corn,  barley  or  other  farm  produce  is 
thus  consigned  "for  orders"  to  some  port  in  the  British 
Isles,  such  as  Queenstown  or  Plymouth.  After  the  ves- 
sel starts,  the  exporter  tries  to  secure  a  purchaser  at 
the  best  available  market.  Upon  arrival  at  port  of  first 
destination,  the  vessel  receives  orders  to  embark  at  once 
for  a  given  port  where  sale  has  been  made.  When  it 
is  remembered  that  the  United  States  exports  yearly 
from  7  to  28  per  cent,  (on  an  average  of  25  per  cent.) 
of  its  domestic  grown  wheat,  and  2  to  10  per  cent,  (on  an 
average  of  5  per  cent.)  of  its  domestic  grown  corn,  it 
will  be  seen  what  this  method  means  in  the  way  of-  se- 
curing the  most  favorable  price  for  farm  produce  and 
in  making  the  price  on  foodstuffs  practically  a  world 
price. 

The  selling-in-transit  method  makes  for  stability  in 
prices,  because  the  moment  local  supply  or  demand 
causes  higher  prices,  the  cargoes  nearest  to  the  point 
are  at  once  diverted  there;  it  makes  for  mobility  in 
food  distribution,  as  even  shipments  already  en  route  to 
another  place  are  instantly  diverted  by  telegraph.  The 
producer,  to  be  sure,  loses  the  occasional  high  local 
market,  but  in  its  stead  he  has  at  his  doors  a  stable 
nation-wide  market.  And  the  consumer  has  his  choice 
of  the  output  of  every  section  of  the  country,  and  that 
at  nation-wide  wholesale  prices. 

It  is  difficult  to  overemphasize  the  far-reaching  ef- 
fect of  these  four  agencies  of  food  distribution  upon 
the  value  of  the  farming  land  in  each  section  of  the 
United  States,  upon  the  output  of  farms,  upon  the 
prices  received  by  farmers,  upon  the  prices  paid  by 
consumers  and  upon  the  character  and  variety  of  the 
urban  dweller's  food  supply.  Their  perfection  and  ex- 
tensive use  have  made  possible  the  increased  value  of 
Iowa  farms,  $2,600,000,000  from  1890  to  1910,  while 


FORCES  FIXING  WHOLESALE  PRICES         47 

Pennsylvania  farms  in  the  same  period,  because  of 
western  competition,  increased  in  value  but  $200,000,000. 
Through  their  development  and  use,  the  farmers  of  the 
Middle  West  and  of  South  America  and  of  Russia  are 
more  potent  factors  in  fixing  the  wholesale  price  of 
the  leading  cereals  in  New  York  City,  for  instance,  than 
are  all  the  New  York  farmers  themselves  combined.  Of 
the  potatoes  eaten  in  Philadelphia,  far  more  are  grown 
abroad  than  in  Pennsylvania.  The  cantaloupe  season 
now  extends  over  five  months  of  the  year  in  many  mar- 
kets. Kansas  City  gets  its  lettuce  from  California, 
Florida,  Louisiana,  Texas,  Arkansas,  Colorado  and  New 
York. 

Producers  everywhere  must  reshape  their  output  and 
their  marketing  methods  in  the  light  of  these  four  fac- 
tors in  food  distribution.  Local  farmers  no  longer  get 
their  early  market  prices,  but  instead  they  now  have 
a  nation-wide  market.  Thus  by  the  time  the  output  of 
Pennsylvania  orchards  and  gardens  is  marketable,  city 
consumers  throughout  the  community  have  long  since 
been  supplied  with  exactly  those  articles,  at  relatively 
slight  transportation  costs  and  with  practically  no  de- 
terioration, from  Texas,  Florida,  and  other  southern 
fields,  orchards  and  gardens.  The  first  shipment  of  early 
southern  vegetables  to  northern  states  was  a  boatload 
from  Norfolk  in  1855.  ^n  J912  tne  Pennsylvania  rail- 
road alone  hauled  nearly  100,000  cars  of  southern  truck 
products  to  northern  markets.  Southern  truck  farms  are 
consequently  going  up  in  value. 

By  multiplying  and  diversifying  the  markets  available 
to  the  growers  of  any  one  section  these  factors  have 
assured  stability  and  better  producers'  prices.  Thus 
North  Carolina  fruit  growers  and  truck  growers  some 
years  ago  shipped  not  over  four  hundred  cars  of  straw- 
berries to  not  over  twelve  different  markets.  The  result 


48  LOWER  LIVING  COSTS  IN  CITIES 

was  a  glut  in  these  markets  with  lower  prices  to  straw- 
berry growers.  Through  the  use  of  the  factors  above 
described,  these  same  growers  now  ship  3,200  cars  of 
strawberries  to  eighty-two  markets,  receive  a  better  price 
and  make  a  more  stable  price  for  consumers.  Western 
New  York  has  a  choice  of  two  hundred  and  seventy- 
five  markets  for  its  peaches ;  higher  prices  for  pro- 
ducers and  reliable  prices  for  consumers  are  the  result. 
These  nation-wide  forces,  no  doubt,  largely  account  for 
the  increase  of  58  per  cent,  in  the  wholesale  price  of  ten 
leading  crops  for  the  period  1907  to  1912,  as  compared 
with  the  period  from  1893  to  1896.  The  effectiveness 
of  these  four  factors  on  producers'  prices  and  producers' 
methods  can,  no  doubt,  be  largely  increased  through 
national,  state  and  city  reports  on  consumers'  prices. 

As  great  as  is  the  effect  of  these  forces  upon  pro- 
ducers' prices  and  producers'  methods,  their  effectiveness 
on  the  wholesomeness,  variety  and  price-reliability  of 
the  city's  food  supply  has  been  even  greater.  The  city 
consumer  can  now  have  strawberries  from  February, 
when  the  Florida  strawberries  come  to  market,  until 
the  latter  end  of  July,  when  strawberries  come  in  from 
northern  United  States.  Of  maximum  effectiveness  on 
the  price  of  cold  storage  eggs  is  the  fact  that  through 
these  forces  the  urban  consumer  can  be  supplied  with 
fresh  eggs  from  Kentucky  and  Tennessee  from  December 
to  April;  from  Texas,  Southern  Ohio,  Missouri  and 
Kansas  from  March  to  April;  from  Iowa,  Kansas,  Illi- 
nois, etc.,  during  the  summer;  and  from  Minnesota  and 
Michigan  during  the  late  summer.  The  resident  of  New 
York  City  now  gets  his  Cape  May  cauliflower  four 
weeks  before  he  used  to  be  able  to  get  cauliflowers  from 
Long  Island. 

Such  factors  as  these  have  made  the  world  the  city's 
truck  patch  and  the  sea  its  harbor. 


CHAPTER    VI 

THE   MIDDLEMAN 

The  "middleman"  has  been  held  responsible  for  it  all. 

The  widespread  publicity  of  consumers'  versus  pro- 
ducers' prices  in  the  last  few  years  has  left  the  im- 
pression with  many  that  some  useless  "middlemen"  were 
simply  in  the  way,  and  that  society  was  paying  them 
to  get  in  the  way.  Distribution  costs  such  as  are  depicted 
in  the  chapter  by  that  title  are  recounted  to  show  that 
the  total  cost  of  collecting  goods  at  the  farmers'  station 
and  delivering  them  to  the  consumer  was  larger  than 
the  price  received  by  the  farmer  for  his  goods,  despite 
his  larger  work  and  outlay — "the  farmer's  thirty-five- 
cent  dollar,"  the  phrase  has  it.  Food  products  must  pass 
from  farmer  to  country  buyer,  to  jobber,  to  retailer,  to 
consumer.  This  route  of  itself  was  put  in  evidence  to 
prove  that  the  middleman  was  to  blame  for  higher  prices. 
Still  others  added  the  carter  between  each  of  these  classes 
of  middlemen  and  made  food  distribution  sound  like 
a  baseball  game,  at  which  the  consumer  pays  the  costs 
and  the  players  get  the  proceeds :  from  farmer  to  coun- 
try buyer,  to  railroad,  to  carter,  to  wholesaler,  to  carter, 
to  jobber,  to  carter,  to  retailer,  to  delivery  boy,  to  con- 
sumer,— and  the  ball  has  gone  through  the  hands  of 
the  whole  nine. 

And  such  is  the  route  that  products  follow.  But  is 
the  middleman  useless?  Does  he  perform  no  economic 
function?  May  he  be  wholly  eliminated  and  produce 
be  sold  directly  from  farmer  to  consumer? 

49 


50  LOWER  LIVING  COSTS  IN  CITIES 

These  queries  are  best  answered  by  a  critical  study 
of  the  work  performed  by  each  class  of  these  middlemen 
from  country  buyer  to  retailer. 

The  country  buyer  locates  the  produce,  assembles  it 
into  car  lots,  chooses  the  best  market  and  finds  the 
buyer.  He  assumes  the  risk  of  falling  prices  and  of  mis- 
representations by  farmers  as  to  the  sorting  and  pack- 
ing of  their  goods.  What  he  pays  the  farmer  will  also 
depend  largely  upon  what  the  farmer's  business  and  credit 
relations  are  with  him.  The  compensation  he  receives 
for  his  work  and  risks  is  the  difference  between  the 
price  he  pays  the  farmer  and  the  price  he  receives  from 
the  wholesaler  or  jobber. 

The  wholesale  receiver  must  be  a  market  specialist 
both  as  to  the  demand  and  supply.  He  must  locate 
quantities  in  the  country  in  car  or  train  lots,  and  hunt 
buyers,  usually  the  jobber.  He  must  inspect  goods  to 
see  if  they  are  as  represented  and  must  repack  and 
resort  them  if  that  has  not  been  done  reliably  and  to 
the  best  interests  of  the  market.  He  is,  therefore,  by 
nature  a  "bear"  on  grades.  Formerly  this  work  was 
done  solely  on  commission.  At  the  present  time,  as  is 
pointed  out  more  particularly  in  the  chapter  on  A  Short- 
er Route  from  Producer  to  Consumer,  the  wholesaler  is 
turning  jobber  and  buying  his  produce  for  cash.  The 
custom  of  selling  on  commission,  however,  still  prevails 
in  the  livestock  and  grain  trades. 

The  commission  charged  does  not  seem  to  be  excessive. 
For  selling  fruits  and  vegetables,  the  commission  ranges 
from  5  to  10  per  cent,  of  the  gross  proceeds  of  sales. 
The  rules  of  the  Minneapolis  Chamber  of  Commerce 
fix  the  minimum  rate  for  selling  wheat,  barley  or  rye 
at  one  cent  per  bushel ;  for  selling  corn  or  oats,  at  one- 
half  cent  a  bushel.  About  the  same  charges  prevail  in 
other  large  markets.  In  the  livestock  trade,  in  South 


THE  MIDDLEMAN  51 

Omaha,  Nebraska,  the  commission  charged  is  much 
less  than  I  per  cent,  of  the  sales.  As  has  been  shown 
in  the  chapter  on  The  Cost  of  Food  Distribution,  the 
total  charges  for  selling  through  commission  men,  in- 
cluding haulage,  cartage,  freight,  etc.,  does  not  exceed 
10  per  cent.  Moreover,  the  rate  of  commission  has  no 
doubt  been  very  materially  lowered  in  recent  years,  and 
there  is  every  evidence  of  virile  competition  between  the 
commission  houses.  A  commission  merchant  who  has 
been  "in  the  business  for  twenty-eight  years,"  writes 
the  author:  "I  think  from  my  experience  that  the 
jobbers  and  commission  merchants  are  making  less 
money  on  the  fruits  and  vegetables." 

Some  commission  men  furnish  credit  and  others  ad- 
vance money.  Indeed,  the  marketing  of  farm  products 
is  financed  to  90  per  cent,  of  its  value  on  borrowed  funds. 
These  funds  are,  to  a  large  extent,  borrowed  through 
the  middleman,  usually  the  wholesaler  or  jobber.  The 
country  shippers  often  find  it  impossible,  when  their 
own  capital  becomes  tied  up,  to  continue  to  buy  farmers' 
produce.  Then  it  is  that  the  commission  firms  supply 
credit,  the  security  for  which  is  expressed  either  in  bills 
of  lading  or  warehouse  receipts. 

The  jobber  is  the  specialist  in  what  retailers  want  and 
what  wholesalers  have  to  sell.  Through  the  jobber  the 
retailer  gets  just  the  goods  he  wants.  The  jobber  must 
often  sort  and  pack  to  suit  the  wants  of  retailers;  and, 
as  he  is  selling  at  the  best  price  possible,  he  tends  to  be 
a  "bull"  on  grades.  His  profit  is  expressed  in  the  dif- 
ference in  price  between  what  he  pays  the  wholesale 
receiver  and  what  he  gets  from  the  retailer.  The  rea- 
son for  his  existence  is  that  retailers  are  unable  to  get 
directly  from  the  farmer  or  the  wholesaler  exactly  the 
grade  and  quantity  of  farm  produce  desired.  The  dis- 
tinctive feature  of  the  changes  in  food  distribution  in 


52  LOWER  LIVING  COSTS  IN  CITIES 

the  last  decade  has  been  the  rapid  growth  of  the  cash- 
buying  jobber  to  a  point  where  practically  all  the  perish- 
able foods  are  now  handled  by  this  class  of  middlemen. 

The  jobber  and  the  commission  merchant  must  also 
be  specialists  on  the  conservation  of  foodstuffs  by  cold 
storage  or  other  means.  In  order  to  sell  to  retail  agen- 
cies in  desired  amounts,  at  the  time  and  place  wanted, 
the  jobber  must  be  equipped  with  a  suitable  delivery 
service.  His  trade,  therefore,  suffers  from  all  the  fluctua- 
tions and  variations  in  demand  and  supply,  so  disastrous 
to  the  retailer.  Thus,  if  the  weather  is  attractive,  and 
housewives  venture  forth  in  large  numbers  to  open  mar- 
kets, the  demand  for  the  jobber's  goods  must  necessarily 
fall  off.  A  sudden  rise  in  the  price  of  sugar  will  ma- 
terially affect  the  possibilities  for  the  jobber's  getting 
rid  of  even  a  normal  amount  of  fruits. 

The  functions  of  the  retailer  are  so  evident  as  to 
need  slight  mention  here.  Those  who  talk  of  "eliminat- 
ing the  middleman"  usually  do  not  include  the  retailer 
any  more  than  they  include  the  railroad  in  their  definition 
of  middleman. 

Definite  functions  are  likewise  performed  by  the  pro- 
duce exchanges  and  other  organizations  of  commission 
men  and  jobbers.  A  typical  example  is  the  Chicago 
Board  of  Trade  with  1,608  members.  Of  these,  469 
have  headquarters  outside  the  city  of  Chicago,  many  as 
far  distant  as  Philadelphia.  Of  the  1,608  members,  788 
are  commission  merchants,  341  grain  brokers,  40  bank- 
ers, 47  packers,  122  brokers,  etc.  In  the  St.  Louis  Ex- 
change there  are  1,214  members.  The  real  estate  hold- 
ings of  the  Minneapolis  Chamber  of  Commerce  now 
represent  an  investment  of  over  $1,000,000.  Member- 
ship in  that  organization  is  worth  in  the  neighborhood  of 
$4,000,  though  a  high-water  mark  of  $5,000  has  been 
reached. 


THE  MIDDLEMAN  53 

These  exchanges  fix  the  ethical  and  business  standards 
for  their  members,  penalize  their  members  for  uncom- 
mercial conduct,  and,  in  general,  fix  the  business  stand- 
ards for  their  trade.  For  example,  a  rule  of  the  South 
Omaha  Live  Stock  Exchange  reads :  "Any  member  of 
this  Exchange,  or  firm  in  which  he  is  a  partner,  or  cor- 
poration in  which  he  is  a  stockholder,  or  his  or  their 
employee,  who  shall  circulate  false  or  misleading  state- 
ments of  any  kind  or  character  concerning  a  member  of 
this  Exchange,  or  circulate  or  cause  to  be  circulated  any 
report  concerning  the  attitude  or  action  of  any  member, 
relative  to  the  passage,  or  proposed  passage,  of  any  Rule 
or  Amendment  to  any  Rule  of  this  Exchange,  for  the 
purpose  of  injuring  the  business  or  credit  of  such  mem- 
ber or  securing  a  consignment  of  livestock,  or  any  mem- 
ber soliciting  a  shipment  after  same  has  been  consigned 
to  another  member,  either  in  transit  or  after  arrival  at 
the  Stock  Yards,  shall  be  deemed  guilty  of  a  violation 
of  this  Rule  and  for  the  first  offense  shall  be  fined  in 
any  sum  in  the  discretion  of  the  Board  of  Directors ;  for 
the  second  offense  $250.00;  for  the  third  offense  any 
sum  not  exceeding  $500.00,  or  expulsion  from  the  Ex- 
change, or  both,  at  the  discretion  of  the  Board  of  Di- 
rectors." 

These  organizations  also  fix  the  minimum  commissions 
which  their  members  may  charge.  The  advantage  in 
this  uniformity  is  that  all  shippers  to  that  particular 
market  are  treated  alike.  Such  a  rule  further  tends  to 
protect  the  shipper  from  exorbitant  charges.  The  ex- 
changes also  fix  the  grain  storage  rates,1  regulate  the 

1The  Board  of  Trade  of  Chicago  has  fixed  the  following  rates 
for  the  storage  of  grain :  not  in  excess  of  one  cent  per  bushel 
for  the  first  ten  days  or  part  thereof,  and  one-thirtieth  of  one 
cent  per  bushel  for  each  additional  day  thereafter  so  long  as 
such  grain  or  flaxseed  remains  in  good  condition. 


54  LOWER  LIVING  COSTS  IN  CITIES 

inspection,  grading,  weighing,  storage  and  shipment  of 
grain,  the  brokerage  rates  for  the  various  types  of  service 
rendered  and  the  deposits  necessary  for  the  fulfillment  of 
time  contracts.  They  frequently  interest  themselves  in 
the  rail  and  water  rates  charged  into  and  out  of  their 
market,  and  disseminate  business  information  useful  to 
their  members.  The  Merchants'  Exchange  of  St.  Louis 
spends  annually  from  sixteen  to  seventeen  thousand  dol- 
lars for  market  reports  and  telegraphic  service.  The  con- 
stitution of  the  National  League  of  Commission  Mer- 
chants states  the  objects  of  the  League  among  others  to 
be:  "To  concentrate  action  upon  the  general  welfare  of 
the  trade,  in  uniting  our  efforts  with  growers  and  pro- 
ducers against  the  enactment  of  damaging  laws,  in  col- 
lecting and  disseminating  information,  in  improving  busi- 
ness methods ;  in  protesting  against  testimonies,  execu- 
tions and  damages  to  transportation ;  in  demanding  in- 
tegrity and  financial  responsibility  and  in  the  protection 
of  all,  as  far  as  possible,  from  freight  misrepresentation 
and  injustice."  The  Wholesale  Growers'  Exchange  of 
Chicago  is  organized  for  "the  purpose  of  exchange  of 
credit  information  and  the  handling  of  such  matters  of 
common  interest  as  pure  food  legislation,  railroad  rates, 
etc." 

And,  finally,  through  the  sales  of  "futures,"  that  is, 
selling  in  January,  say,  the  wheat  crops  of  the  next 
July,  these  primary  pits  guarantee  stability  in  price  alike 
to  the  grower  and  the  retailer.  It  is  in  the  primary 
markets  under  the  control  of  these  exchanges  and 
organizations  that  the  countless  economic  and  agri- 
cultural forces  of  this  and  other  countries  are  trans- 
muted into  stable  wholesale  prices.  In  this  way,  too, 
these  exchanges  furnish  a  continuous  market,  make 
possible  the  discounting  of  the  future,  help  to  reg- 
ulate the  rate  at  which  the  year's  crop  is  con- 


THE  MIDDLEMAN  55 

sumed,    and    serve    to    level    prices    between    different 
markets. 

The  vast  amount  of  food  products  moved  each  year 
further  points  to  the  effective  service  rendered  by  these 
market  specialists  called  the  middlemen.  The  livestock 
on  the  farms  of  the  United  States  is  worth  in  excess  of 
five  billion  dollars.  Much  of  this  amount  annually  flows 
through  the  livestock  markets.  The  Chicago  livestock 
market  alone  handled  7,180,967  head  of  stock  in  the 
year  1912.  The  value  of  the  crops  of  corn,  winter  wheat, 
spring  wheat,  oats,  barley,  rye,  buckwheat,  hay,  flax- 
seed,  tobacco,  and  potatoes  (Irish)  in  the  United  States 
in  1912  was  $3,883,026,000.  At  the  St.  Louis  Merchants' 
Exchange,  in  1913,  352,215  barrels  and  215,315  boxes 
of  apples  were  received;  of  oranges,  lemons,  and  grape 
fruit,  the  receipts  approximated  about  1,500  to  1,800 
cars,  and  of  the  latter  upward  of  1,200  cars.  The  re- 
ceipts of  grain  and  wheat  in  1913  at  Duluth  and  Supe- 
rior were:  grain,  112,560,717  bushels;  wheat,  81,168,- 
109  bushels.  St.  Louis,  in  1913,  shows  the  following  re- 
ceipts: grain,  80,498,694  bushels;  wheat,  31,258,471 
bushels.  In  New  York  City,  in  1912,  4,723,520  cases 
of  eggs  were  received.  Some  idea  of  the  receipts  of 
domestic  produce  in  the  last-named  city  can  be  gleaned 
from  the  following  figures  for  1912 :  receipts  of  flour, 
2,432,909  barrels  and  8,732,607  sacks;  of  wheat,  45,- 
976,100  bushels;  of  corn,  7,463,972  bushels;  of  oats,  24,- 
152,650  bushels;  of  barley,  7,070,864  bushels;  of  flax- 
seed,  5,229,013  bushels;  of  cheese,  712,440  boxes;  of 
pork,  30,722  barrels,  etc.  The  commercial  production  of 
apples  in  the  United  States  last  fall  (1913)  was  approxi- 
mately 15,650,000  barrels,  or  about  96,850  minimum  car- 
loads. Thirty-five  states  participated  in  the  production 
of  this  crop.  The  total  production  of  potatoes  for  the 
year  1913  was  328,550,000  bushels,  equivalent  to  657,- 


56  LOWER  LIVING  COSTS  IN  CITIES 

TOO  minimum  carloads.  For  the  previous  year  the  pro- 
duction was  420,000,000  bushels.  The  handling  of  these 
vast  quantities,  their  concentration  into  car  lots,  their 
subdivision  into  quantities  desired  by  the  consumer — 
these  are  three  of  the  many  functions  of  "the  middle- 
men." 

The  conclusion  that  must  inevitably  be  reached  is  that, 
under  present  usages  as  to  sorting,  packing,  standardizing, 
and  conserving  food  products,  all  four  types  of  middle- 
men will  long  be  with  us.  A  revolution  must  take  place 
in  the  farmer's  marketing  methods  before  the  country 
buyer  will  cease  to  exist.  In  the  commission  merchant, 
or  wholesale  receiver,  is  a  market  specialist  essential 
to  handling  the  huge  quantities  of  livestock  and  food- 
stuffs necessary  to  satisfy  the  daily  hunger  wants  of 
over  fifty  millions  of  city  people.  The  amount  of  busi- 
ness done  by  the  cash-buying  jobber  is  the  characteristic 
development  of  the  last  decade.  The  retailer's  buying 
methods  must  be  completely  changed  before  the  city  job- 
ber will  have  no  part  in  the  routine  distribution  of  food 
supplies.  And  if  the  tendencies  of  the  last  few  years  are 
taken  as  a  guide,  the  number  of  retail  establishments 
is  distinctly  to  increase  rather  than  diminish. 

But  to  say  that  each  type  of  middleman  will  long  be 
with  us  is  a  very  different  thing  from  saying  that  the 
majority  of  foodstuffs  must  continue  to  pass  through 
the  hands  of  all  four  classes  of  middlemen.  As  is  pointed 
out  more  fully  in  the  chapter  on  A  Shorter  Route  from 
Producer  to  Consumer,  the  farmer  may  sell,  whether 
singly  or  cooperatively,  to  the  retailer.  The  country 
buyer  may  sell  to  the  retailer,  or  the  consumer ;  the  com- 
mission merchant  may  turn  jobber  and  buy  from  the 
farmer  to  sell  to  the  retailer.  The  retailer  may  buy 
from  the  farmer  direct  or  the  farmer  may  sell  to  the 
consumer.  Many  are  the  economic  and  social  forces  now 


THE  MIDDLEMAN  57 

making  for  a  more  direct  and  less  expensive  routing  of 
food  products.  Each  of  the  four  types  of  middlemen 
will  long  persist,  no  doubt,  but  routine  food  prices  in  the 
future  will  probably  not  be  based  as  they  now  are  on  the 
cost  of  routing  food  through  all  four  of  these  classes. 
The  route  is  distinctly  to  be  shortened. 

But  many  are  the  prerequisites  to  a  more  direct  routing 
of  foodstuffs.  First  of  all,  the  facilities  for  storing  and 
preserving  large  quantities  will  have  to  be  materially 
changed.  There  must  be  reliable  standards  of  nation- 
wide acceptance.  The  securing  of  uniform  nation-wide 
standards  in  grades  and  packages  seems  most  feasible 
through  producers'  cooperation,  and  hence  a  later  chapter 
is  given  over  wholly  to  this  subject.  An  example  of  what 
can  be  done  are  the  results  and  standards  already  secured 
in  the  grain  trade.  This  work  was  begun  in  grain  pits 
in  the  primary  markets  and  was  followed  up  and  sup- 
plemented first  by  state  and  finally  by  national  action. 
The  national  Secretary  of  Agriculture  was  authorized 
by  an  act  of  Congress,  of  June  30,  1906,  and  March  4, 
1913,  to  fix  definite  grades  of  grain.  The  need  for  na- 
tional standards  even  in  grains,  however,  is  reflected  by 
the  following  differences  between  grade  I  of  corn,  ac- 
cording to  standards  set  by  national  government  and  by 
various  exchanges: 

GRADE  i— CORN 

UNITED  STATES:  14  per  cent,  of  moisture;  2  per  cent,  damaged 
corn,  exclusive  of  heat,  damaged  or  mahogany  kernels  (max.) ; 
foreign  material,  including  dirt,  cob,  grains,  finely  broken 
corn,  i  per  cent.;  "cracked"  corn,  not  including  finely  broken 
corn,  2  per  cent.;  must  be  sweet;  white  corn,  98  per  cent,  white; 
yellow  corn,  95  per  cent,  yellow;  mixed  corn,  corn  of  various 
colors. 

DULUTH:  15  per  cent,  moisture;  sweet,  white  corn,  98  per  cent, 
white;  yellow  corn,  98  per  cent,  yellow;  mixed  corn,  various 
colors,  sound,  plump,  well  cleaned,  15  per  cent,  moisture. 


58  LOWER  LIVING  COSTS  IN  CITIES 

CHICAGO:  15  per  cent,  moisture;  cob  rotten,  exclusive  of  bin 
burnt  or  mahogany  corn,  i  per  cent.;  dirt  and  broken  grains, 
i  per  cent.;  sweet;  white  corn,  99  per  cent,  white,  well  matured; 
yellow  corn,  99  per  cent,  yellow,  well  matured;  mixed  corn, 
various  colors,  sweet,  well  matured. 

The  need  for  standardization  in  other  grains,  regarding 
which  the  national  government  has  as  yet  taken  no  ac- 
tion, is  indicated  by  the  following  differences  in  the 
standards  for  rye  and  wheat  in  the  primary  markets  of 
New  York,  Duluth,  and  Chicago. 


NEW  YORK                   DULUTH  CHICAGO 

Rye 

No.    i — shall    be        No.     i — shall    be  No.     i — shall    be 
sound,  plump,  and    sound,    plump    and  dry,  sound,  plump, 
well  cleaned.                 well     cleaned     and  sweet  and  well  clean- 
weigh  not  less  than  ed    and    weigh    not 
56  Ibs.  to  the  meas-  less  than  57  Ibs.  to 
ured  bushel.  the  measured  bushel. 


No.  2 — shall  be 
sound,  reasonably 
clean,  contain  not 
less  than  40  per  cent, 
of  the  Hard  varieties 
of  Spring  Wheat  and 
weight  not  less  than 
56  Ibs. — Winchester 
standard. 


Northern  Spring  Wheat 

No.  2 — shall  be 
dry,  spring  wheat, 
not  clean  enough  or 
sound  enough  for 
No.  i,  but  of  good 
milling  quality  and 
must  not  weigh  less 
than  56  Ibs.  to  the 
measured  bushel. 


No.  2 — shall  be 
northern-  grown 
spring  wheat,  not 
clean  or  sound  enough 
for  No.  i,  and  must 
contain  not  less  than 
50  per  cent,  of  the 
hard  varieties  of 
spring  wheat,  and 
weigh  not  less  than 
56  Ibs.  to  the  meas- 
ured bushel. 


The  urgent  need  now  is  for  standardization  in  fruits 
and  vegetables.  Nature  has  already  done  much  to  stand- 
ardize products,  provided  she  be  encouraged  by  careful 
and  scientific  choice  of  seeds.  A  leading  seed  firm  in  a 


THE  MIDDLEMAN  59 

recent  prospectus  states  that  "50  per  cent,  of  the  seeds 
that  are  now  being  sold  to  our  gardeners  come  from  in- 
ferior stocks."  The  standardization  of  seeds  and  the 
standardization  of  growing  processes  can  readily  give  us 
a  standard  product  and  this  standardized  product  can 
have  definite,  reliable  grades  of  national  significance.  Of 
as  great  importance  to  minimum  marketing  costs  is  the 
standardization  of  containers.  So  long  as  beans  are  mar- 
keted as  they  are,  in  bushel  hampers,  in  five-eighths- 
bushel  baskets,  in  barrels,  half-barrels,  bushel  boxes,  one- 
third-bushel  boxes,  the  gallon  and  its  small  divisions,  box 
crates,  hamper  baskets  of  28-quart  and  1^4 -bushel  ca- 
pacity, and  in  32-quart  berry  crates ;  so  long  as  beets  are 
marketed  in  bushel  hampers,  fractional  bushel  baskets, 
stave  baskets,  baskets  of  greater  than  a  bushel  capacity, 
standard  barrels  and'  their  fractions  and  in  32-quart 
crates  as  may  fit  the  imagination  or  tradition  of  the 
grower,  so  long  as  there  is  such  heterogeneity  as  this  in 
containers  even  in  the  same  locality,  let  alone  in  the  same 
state  or  primary  market,  so  that  no  one  container  is  typi- 
cal for  any  one  product  on  any  one  market,  just  so  long 
will  it  be  impossible  for  the  retailer  or  other  buyer  or 
seller  to  know  how  much  or  what  grade  he  is  ordering. 
To  .approach  accuracy,  to  make  produce  available,  to 
make  prompt  ordering  possible,  to  facilitate  sales,  to  con- 
serve space  in  carriers  and  in  storage,  attention  must 
first  be  given  to  the  standardization  of  containers. 

The  costs  incident  to  food  distribution  can  definitely 
be  lowered  by  removing  two  obstacles.  The  first  of 
these  is  the  incomplete  and  unsatisfactory  terminal  ship- 
ping and  storage  facilities  available  to  the  middlemen. 
It  is  a  sound  maxim  that  the  first  step  toward  social 
efficiency  is  to  do  away  with  useless  costs  to  business 
men.  The  improvements  in  existing  transportation  facil- 
ities and  the  coordination  of  food  distributing  agencies 


60  LOWER  LIVING  COSTS  IN  CITIES 

are  discussed  at  length  in  other  chapters  of  this  volume. 
The  second  is  the  elimination  of  certain  abuses  which 
have  arisen  in  the  food  distributing  world.  That  there 
are  many  abuses  and  unwholesome  practices  among  cer- 
tain types  of  middlemen  which  result  in  the  levying  of 
heavy  tribute  moneys  cannot  be  doubted.  Farmers  are 
already  too  familiar  with  such  practices  as  reporting 
goods  to  be  sold  as  low-grade  when  they  were  sold  as 
high-grade;  reporting  half  the  chickens  dead  when  5 
per  cent,  were  dead ;  and  the  making  of  improper  returns. 
Another  practice  is  to  lower  the  published  quotations 
on  goods  sold,  so  that  it  appears  one  or  two  cents  below 
the  price  at  which  sales  were  actually  made.  This  fact 
was  brought  out  in  the  recent  action  of  the  federal 
government  in  imposing  a  fine  on  the  market  commission 
of  Kansas  City.  Still  another  practice  is  to  misrepresent 
the  time  of  a  sale.  For  instance,  if  potatoes  'sell  at  thirty- 
five  cents  a  bushel  in  the  morning,  and  the  price  rises  in 
the  afternoon  to  thirty-eight  cents,  the  commission  man 
reports  sales  as  occurring  in  the  morning,  and  pockets 
the  difference.  Again  commission  men  often  turn  deal- 
ers or  get  a  pecuniary  interest  in  some  retail  establish- 
ment, and  thus  violate  the  first  principle  of  agents :  their 
returns  are  then  no  longer  based  on  getting  the  maximum 
price  for  the  producer  but  on  paying  him  the  minimum 
price  that  they  may  get  the  added  profits  through  re- 
tailing. And,  finally,  there  are  the  possibilities  of  abuses 
in  the  pits  of  the  primary  markets,  such  as  securing  a 
monopoly  through  a  "corner"  on  "futures." 

These  practices  are  of  concern  to  all  because  they  mean 
lower  prices  to  farmers,  and,  therefore,  less  purchasing 
power  in  the  country;  they  mean  the  undermining  of 
the  business  of  the  honest  wholesaler  and  jobber  because 
shipments  are  sent  elsewhere ;  they  destroy  confidence  in 
the  city  to  which  goods  are  sent,  as  marketing  places, 


THE  MIDDLEMAN  6l 

thereby  decreasing  selling  facilities;  they  make  it  more 
difficult  for  producer,  retailer  and  consumer  to  get 
proper  prices  for  their  goods,  and  to  get  goods  at  proper 
prices. 

In  casting  about  for  means  by  which  such  abuses  and 
practices  can  be  eliminated,  the  first  step,  no  doubt,  is 
to  do  away  with  certain  dishonest  practices  by  producers 
themselves.  The  very  fact  that  farmers  are  selling  to 
men  far  from  home  has  le'd  to  questionable  practices 
which  require  the  wholesaler  to  adopt  like  questionable 
practices  in  order  to  protect  himself.  So  long  as  farm- 
ers put  the  culls  at  the  bottom  and  primes  at  the  top 
of  the  barrel,  the  wholesaler  will  be  tempted  to  report 
sale  at  a  lower  grade  than  that  at  which  he  actually 
sold,  in  order  to  compensate  himself  for  the  lower  price 
for  the  inferior  grades  when  the  goods  are  repacked. 
This  all  necessitates  the  unnecessary  expense  of  repacking 
and  regrading,  which  inevitably  cost  more  in  the  city 
than  on  the  farm.  Again,  farmers  are  neglecting  to 
study  their  markets  and  pack  so  as  to  get  top  prices  and 
adapt  their  produce  to  the  local  demand.  The  remedy 
here  is  in  higher  moral  standards  for  individual  farm- 
ers, in  standardizing  goods,  and  in  cooperation  among 
producers.  The  latter  is  so  important  that  a  large  part 
of  another  chapter  is  devoted  to  it. 

A  second  means  of  abating  such  practices  is  to  give 
greater  publicity  to  sales  by  extending  the  custom  of  sell- 
ing at  auction.  There  are  now  three  ways  of  selling 
at  wholesale:  (i)  selling  through  jobbers  or  commission 
men  at  their  own  prices;  (2)  fixing  a  general  price-cur- 
rent by  experts;  (3)  selling  by  auction.  Only  the  two 
latter  methods  need  explanation. 

The  fixing  of  a  producer's  price-current  is  done  as 
follows :  first,  there  is  a  canvass  of  the  market,  in- 
cluding receivers,  sellers  and  buyers,  by  professional  can- 


62  LOWER  LIVING  COSTS  IN  CITIES 

vassers.  This  canvass  is  completed  by  one  o'clock.  The 
results  are  used  for  the  compilation  of  the  average  cur- 
rent price  and  the  "producers'  price  current"  is  printed 
and  is  ready  for  both  buyer  and  seller  by  three  or  three- 
thirty  in  the  afternoon.  The  goods  were  sold  in  the 
morning  subject  to  this  producers'  price  quotation  on 
a  specific  grade  of  goods.  No  representative  of  the  ship- 
per is  present  to  check  prices  and  the  system  has  possible 
in  it  about  all  the  abuses  incident  to  selling  by  commis- 
sion. 

Under  the  auction  system,  goods  are  sold  at  public 
auction  in  the  presence,  not  only  of  a  number  of  buyers, 
but  also  of  agents  of  the  producers  as  well,  and  under 
other  conditions  that  make  for  a  fair,  open  market. 
Samples  are  shown  in  the  auction  room  and  the  goods 
are  in  the  near-by  cars  or  warehouses  for  inspection.  The 
auction  system  is  adopted  almost  exclusively  by  the  citrus 
fruit  trade.  The  fruits  are  sold  by  auction  at  a  cost 
of  not  over  3  to  4  per  cent,  including  deliveries.  Each 
citrus  fruit  association  has  its  agents  in  each  large  city. 
A  similar  auction  system  is  in  use  in  the  terminals  of 
the  Erie  Railroad  at  Buffalo  and  at  the  New  York  Cen- 
tral piers  in  New  York.  The  cost  of  selling  in  Buffalo 
does  not  exceed  over  3  per  cent.  The  great  advantage 
of  this  method  of  selling  is  its  publicity.  Agents  of  the 
seller  can  attend  and  check  both  price  and  quality.  The 
auctioneers  of  such  places  should  be  licensed  by  the 
government  and  be  under  civic  control.  The  extension 
of  this  method  of  selling  goods  will  unquestionably  make 
for  more  stable  and  better  prices  alike  to  producer  and 
consumer.  To  further  such  open  markets  and  to  save 
losses  through  deterioration,  a  terminal  market  in  each 
city  of  any  size  is  absolutely  necessary.  The  place  and 
function  of  the  terminal  market  are  discussed  more  fully 
in  the  chapter  on  Municipal  Markets. 


THE  MIDDLEMAN  63 

The  third  means  for  abating  commission  abuses  is  state 
administrative  supervision  and  regulation.  In  order  to 
assure  just  treatment  to  all,  many  of  the  states  have  al- 
ready taken  over  a  goodly  number  of  functions  formerly 
exercised  solely  by  produce  and  grain  exchanges.  Thus 
in  Illinois  the  Railroad  and  Warehouse  Commission  pre- 
scribes the  rules  for  grain  inspection,  the  rules  and  regu- 
lations as  to  warehouses,  for  hay  and  straw  inspection, 
for  weighing  grains,  for  the  regulation  of  terminal  ele- 
vators, etc.  Minnesota,  also,  through  its  Railroad  and 
Warehouse  Commission,  has  undertaken  a  similar  super- 
vision of  the  primary  markets  of  that  state.  In  Kansas 
there  is  a  State  Grain  and  Inspection  Department  which 
lays  down  the  laws,  rules  and  regulations  governing  the 
inspection  and  weighing  of  grain.  In  numerous  states 
the  guiding  regulations  as  to  warehouses  and  warehouse 
receipts,  etc.,  are  fully  covered  in  the  statutes. 

The  tendency  of  the  present  time  is  to  extend  state 
control  over  the  activities  of  the  grain  pit  itself  with 
particular  reference  to  prohibiting  the  abuses  arising  out 
of  sales  of  "futures,"  and  in  a  special  effort  to  prevent 
any  monopolistic  control  in  the  price-making  pits.  We 
have  not  yet  given  to  these  price-rrjaking  pits  the  social 
thought  that  is  warranted  by  their  functions  and  powers 
of  abuse.  As  has  been  pointed  out  by  Willet  M.  Hays, 
formerly  Assistant  Secretary  of  Agriculture,  certain  mis- 
chievous factors  arise  which  "prevent  the  free  action  of 
the  law  of  supply  and  demand,  and  the  trading  pit  be- 
comes an  agency  interfering  with  what  would  be  the 
natural  course  of  events  in  the  commercial  world." 

Another  type  of  administrative  regulation  and  super- 
vision are  the  provisions  now  being  generally  adopted 
by  the  states  of  the  Union  regulating  the  commission 
and  jobbing  business,  with  the  sole  purpose  of  eliminat- 
ing the  abuses  that  have  been  all  too  prevalent  therein. 


64  LOWER  LIVING  COSTS  IN  CITIES 

The  laws  that  have  been  passed  on  this  subject  include 
the  following  provisions,  all  of  which  have  been  in  use 
for  a  sufficient  time  in  one  or  more  of  the  states  of  the 
Union  to  test  their  worth.  They  are,  therefore,  in  every 
sense  of  the  word  "practical" — practical  because  they 
have  worked,  and  practical  because  they  get  results. 
These  provisions  are: 

1.  Specific  definitions  as  to  embezzlement  and  fraud 
with  definite  punishments  therefor. 

2.  A  provision  that  all  persons,  firms  and  corpora- 
tions engaged  in  selling  agricultural  produce  on  commis- 
sion should  take  out  a  license  from  the  Secretary  of 
Agriculture  or  some  other  specific  state  official. 

3.  A  stipulation  that  each  of  these  persons,  firms  or 
corporations  so  licensed  should  file  a  bond  for  a  stated 
su"m  conditioned  upon  the  payment  of  all  moneys  owing  to 
farmers    who   have   consigned   agricultural   produce   to 
them. 

4.  Provisions  prescribing  the  forms  for  the  books  to 
be  kept  by  such  commission  merchants,  and  requiring 
these  books  to  be  open  for  inspection  both  by  the  shipper 
and  by  a  particular  state  official,  such  as  the  Secretary  of 
Agriculture,  or  his  duly  authorized  agent. 

5.  Provisions  requiring  detailed   reports  to  be  sub- 
mitted to  farmers  and  to  the  Secretary  of  Agriculture 
covering  the  condition  in  which  the  produce  was  received, 
the  state  of  the  market,  price  received,  etc. 

6.  An  informal  and  inexpensive  means  by  which  the 
farmer  can  investigate  any  complaints  as  to  service  or 
prices  and  secure  redress  when  neglect  or  fraud  seems 
evident. 

In  the  development  of  statutory  regulation  of  the 
commission  merchant,  the  first  step  was  to  provide  heavy 
penalties  for  the  embezzlement  of  farm  products  by  com- 
mission merchants.  To  be  sure,  no  specific  statute  is 


THE  MIDDLEMAN  65 

needed  in  order  to  make  such  embezzlement  a  crime,  but 
statutes  specifically  defining  this  particular  type  of  em- 
bezzlement, and  fixing  specific  penalties  therefor,  make 
prosecution  easier  and  the  punishment  to  be  affixed  heav- 
ier and  more  definite. 

Thus  many  of  the  states  define  embezzlement  of  this 
kind  as  "selling,  or  in  any  way  disposing  of,  or  applying, 
or  converting,  for  one's  own  use,  with  intent  to  defraud, 
any  bill  of  lading,  custom  house  permit,  or  warehouse 
receipt  intrusted  to  or  in  the  possession  of  a  commission 
merchant,  or  any  property  intrusted  to  or  consigned"  to 
the  commission  merchant.  The  penalties  for  such  em- 
bezzlement are  variously  fixed  as  imprisonment  for  from 
one  to  five  years  and  a  fine  of  from  $100  to  $5OO.1 

But  it  was  soon  found  that  the  statutes  to  be  effective 
had  to  do  much  more  than  simply  define  such  acts  as 
embezzlement  and  fix  specific  penalties  therefor.  The 
farmer  himself  reaps  no  returns  on  conviction  for  em- 

*In  Indiana  the  penalty  is  imprisonment  in  the  state  prison  of 
from  one  to  five  years ;  a  fine  of  not  more  than  $100 ;  and  dis- 
f  ranchisement  and  incapacity  to  hold  any  office  of  trust  or  profit 
for  any  determinate  period.  In  Virginia,  the  offender  is  deemed 
guilty  of  larceny.  In  Massachusetts,  the  penalty  is  a  fine  of  not 
over  $5,000  and  imprisonment  for  not  over  five  years.  In  Idaho 
the  embezzler  is  liable  to  person  injured  in  double  value  of 
property  converted.  In  Illinois  the  penalty  is  a  fine  not  exceed- 
ing $1,000  or  imprisonment  in  county  jail  for  not  over  one  year, 
or  both,  and  the  embezzler  is  liable  to  the  person  injured  in 
double  value  of  the  property  or  amount  of  money  so  converted. 
In  Nebraska  the  punishment  is  that  provided  by  law  for  felon- 
iously stealing  property  of  the  value  of  article  embezzled.  Mis- 
souri makes  such  an  act  a  misdemeanor  punishable  by  a  fine  of 
from  $100  to  $1,000  or  imprisonment.  Ohio  makes  it  a  peniten- 
tiary offense  with  confinement  in  prison  for  not  less  than  two  or 
more  than  four  years.  In  Oregon,  the  convicted  party  may  be 
imprisoned  in  the  county  jail  for  from  three  months  to  a  year, 
or  be  fined  from  $50  to  $1,000.  In  the  District  of  Columbia  the 
term  of  imprisonment  may  be  as  long  as  ten  years. 


66  LOWER  LIVING  COSTS  IN  CITIES 

bezzlement,  especially,  as  so  often  happens,  if  the  middle- 
man in  question  has  no  property  upon  which  civil  dam- 
ages can  be  levied.  Our  states,  therefore,  are  rapidly 
extending  their  statutes  so  as  to  give  to  the  state  con- 
tinuous administrative  control  over  the  commission  busi- 
ness and  to  give  to  the  farmer  an  easy  and  inexpensive 
means  of  seeking  redress.  The  following  paragraphs  will 
set  forth  the  method  by  which  this  can  be  accomplished. 

Requiring  the  commission  merchant  to  take  out  a 
license  tends  to  make  him  transact  business  legiti- 
mately, as  violations  of  the  prescribed  regulations  mean 
revocation  of  the  license.  Chief  among  the  states  requir- 
ing such  licenses  are  Virginia,  and,  for  cities  of  over 
50,000,  Illinois.  In  Illinois  the  license  costs  $25.00. 
Transacting  business  without  securing  such  a  license  is 
punishable  by  a  fine  of  from  $50  to  $200.  In  Virginia 
the  license  fee  is  $50,  save  when  commissions  exceed 
$  1,000,  when  the  fee  is  $60,  and  $10  for  each  thousand 
in  excess  of  $2,000. 

To  make  sure  that  the  commission  merchant  may  not 
abscond  from  the  state  and  leave  no  property  behind 
upon  which  farmers  may  levy  for  goods  sent  him  or 
money  due  from  him,  many  states  require  every  commis- 
sion merchant,  before  he  can  legally  engage  in  business 
in  the  state,  to  file  a  bond  of  from  $2,000  to  $20,000. 
Thus  Texas  requires  that  the  applicant  give  a  bond  in  the 
sum  of  $2,000.  The  carrying  on  of  such  a  business  with- 
out filing  this  bond  is  subject  to  a  fine  of  from  $100  to 
$1,000. 

Many  states  prescribe  both  a  bond  and  a  license  as 
prerequisites  for  carrying  on  the  business  of  commission 
merchant.  Thus  Washington  requires  a  bond  of  $3,000, 
and  a  license  from  the  Commissioner  of  Horticulture.1 

1West  Virginia  provides  for  a  bond  of  $1,000  and  a  license. 
Nebraska  prescribes  a  bond  of  $2,000  and  a  license  from  the 


THE  MIDDLEMAN  67 

The  Washington  statute  offers  model  provisions  as  to 
the  forms  of  books  requiring  that  every  commission  mer- 
chant shall  keep  an  accurate  and  complete  set  of  books, 
containing  a  record  of  the  amount  and  character  of  every 
consignment  received,  date  of  receipt,  name  of  consignor, 
condition  of  shipment  when  received,  and  when  same  or 
any  part  is  sold,  name  of  person  to  whom  sold,  amount, 
date  of  sale,  etc.  Similar  provisions  for  record  keeping 
are  found  in  Ohio  and  Illinois.  (In  Ohio,  the  books  are 
open  at  all  times,  upon  request  of  any  consignor  or  his 
duly  authorized  agent.)  It  will  be  noticed  that  the  forms 
prescribed  require  such  accounts  as  any  fairly  efficient 
firm  or  merchant  ought  to  keep.  The  keeping  of  accounts 
in  prescribed  forms  not  only  makes  for  uniformity  but 
also  provides  a  reliable  record  in  case  of  suits  or  ques- 
tions. All  of  our  railways — state  and  interstate — and 
most  of  our  telephone,  gas,  street  railway,  water  and 
other  public  utilities,  are  now  required  to  keep  uniform 
accounts  open  to  the  scrutiny  of  specified  government 
officials.  Our  long  history  in  this  field  has  proved  that 
such  regulations  are  of  value  not  only  to  the  public,  but  to 
the  companies  as  well.  Only  by  this  method  can  both 
get  the  information  needed  for  sane  and  well-considered 
action. 

The  requirement  that  itemized  statements  be  sent  to 

Food,  Dairy  and  Drug  Commissioner.  In  North  Dakota  a  bond 
of  not  less  than  $20,000,  approved  by  the  Board  of  Railroad 
Commissioners,  and  a  license  secured  from  the  aforementioned 
Board  are  required.  In  Minnesota  a  bond  of  $4,000  is  demanded 
if  the  license  authorizes  the  sale  of  grain,  and  the  Railroad  and 
Warehouse  Commission  may  increase  the  bond  if  deemed  neces- 
sary, whether  or  not  grain  is  sold.  A  special  license  must  be 
taken  out  if  grain  is  to  be  handled.  The  fee  for  securing  a 
license  is  $2.  These  states  prescribe  heavy  penalties,  usually 
fines  of  from  $100  to  $1,000,  for  attempting  to  do  business  with- 
out such  bonds  and  license. 


68  LOWER  LIVING  COSTS  IN  CITIES 

all  consignors  as  to  place  and  time  of  sale,  price  re- 
ceived, etc.,  minimizes  the  possibility  of  embezzling  money 
properly  due  the  farmer,  and  gives  the  farmer  some 
check  on  the  reliability  of  the  returns  sent  him.  At  the 
same  time,  it  makes  him  realize  the  importance  of  better 
standardization  and  packing  of  his  own  produce  if  he 
is  to  get  fair  prices.  The  Washington  provision  regard- 
ing this  point  is  worthy  of  consideration.  It  provides 
that  if  the  produce  is  received  in  a  damaged  condition, 
or  is  unfit  for  sale,  or  if  the  markets  are  overstocked, 
the  commission  merchant  must  notify  the  Commissioner 
of  Horticulture  or  the  county  fruit  inspector  and  get 
from  him  a  certificate  that  such  produce  is  not  salable 
and  that  it  is  necessary  to  destroy  it.  This  certificate  is 
made  out  in  duplicate,  one  copy  being  sent  to  the  con- 
signor. Such  detailed  statements  are  of  inestimable  value 
to  the  farmer. 

Through  a  continuous  control  over  the  commission 
business,  the  state  can  offer  to  the  farmer  an  inexpensive 
yet  efficient  means  of  seeking  redress.  Thus  in  Wash- 
ington, a  shipper  may  appeal  to  the  county  fruit  inspector 
or  the  Commissioner  of  Horticulture  and  this  state  official 
is  then  authorized  to  investigate  thoroughly  into  the 
farmer's  complaint.  This  means  but  slight  expense,  noth- 
ing more  indeed  than  a  'phone  message  or  a  letter  to  the 
state  official,  and  yet  it  gives  a  simple  and  effective  meth- 
od for  checking  up  results.  To  be  sure,  the  more  serious 
cases  pertaining  to  embezzlement  or  shortage  of  accounts 
would  have  to  go  before  the  courts,  but  it  would  usually 
be  found  that  inquiry  by  the  state  official  would  secure 
adjustment  to  the  satisfaction  of  farmer  and  commission 
merchant  alike.  Many  of  our  state  public  service  com- 
missions have  a  splendid  history  in  this  respect.  Though 
informal  complaints  have  come  in  to  them  by  the  hun- 
dreds, they  have  usually  been  solved  quite  to  the  satis- 


THE  MIDDLEMAN  69 

faction  of  the  person  making  the  complaint  and  the  com- 
pany as  well. 

Such  have  been  the  most  successful  of  the  methods 
for  regulating  the  commission  business  that  have  thus 
far  been  adopted.  And  what  have  been  their  results? 
Stability  in  trade;  better  standards  in  grading  and  sort- 
ing goods,  for  under  regulation  the  farmer  does  not  have 
to  engage  in  sharp  practices  in  order  to  break  even; 
the  doing  away  with  dissatisfaction  with  the  middleman 
as  such.  In  Washington,  in  Minnesota,  in  Texas  and  in 
other  states  that  might  be  mentioned,  the  commission 
merchants  have  come  to  agree  that  the  laws  are  beneficial 
to  wholesome,  reliable  trading.  And,  finally,  in  stable 
trade  conditions  lie  the  possibilities  for  lower  living  costs 
to  the  urban  dweller. 

The  producer  can  be  given  a  steady  market  for  his 
produce,  the  cities  can  be  given  maximum  variety  of 
foodstuffs,  and  distribution  costs,  and  hence  consumers' 
prices,  can  ultimately  be  materially  lowered  by  the  adop- 
tion of  these  methods  of  eliminating  the  abuses  now  in- 
cident to  fixing  wholesale  prices.  The  forces  fixing 
wholesale  prices  can  then  act  freely  to  secure  both  sta- 
bility in  prices  and  fluidity  in  the  distribution  of  the  food 
supply. 


CHAPTER   VII 
CONTROLLABLE   ELEMENTS   IN   RETAIL  PRICES 

As  discussed  in  detail  in  the  chapter  on  The  Cost  of 
Food  Distribution,  a  relatively  large  amount  of  food 
costs  goes  to  the  retailer  in  costs  and  profits.  Of  prime 
importance,  therefore,  is  a  study  of  retailers'  costs  and 
practices  in  order  to  ascertain  what  costs  are  added,  and 
how  unnecessary  costs  may,  if  possible,  be  eliminated  or 
reduced. 

The  situation  as  to  food  retailers  in  the  twentieth  cen- 
tury city  can  well  be  illustrated  by  the  types  and  number 
of  retail  grocery  stores  in  Philadelphia.  In  that  city  in 
1913  there  were  six  companies  operating  a  total  of  490 
"chain"  stores :  The  Acme  Tea  Company  had  201 ;  Rob- 
inson &  Crawford,  100;  The  Butler  Company,  51;  The 
Mecca  Market  Company,  24;  the  James  Bell  Company, 
73;  and  George  M.  Dunlap,  41.  Then  there  were  700 
retail  grocers  who  were  members  of  the  Retail  Grocers' 
Association  and  who  bought  collectively,  as  largely  as 
possible,  through  a  wholesale  corporation  known  as  the 
Girard  Grocery  Company.  In  addition  to  these  two  main 
groups,  there  were  4,169  smaller  "independent"  corner 
grocers.  To  this  number  of  small  grocers  should  also 
be  added  2,000  butchers  and  meat  dealers,  at  least  200 
of  whom  also  carried  groceries  as  a  side  line.  There 
were  also  258  delicatessen  stores  and  1,923  variety  stores, 
a  large  number  of  which  carried  a  greater  or  less  amount 
of  foodstuffs.  This  makes  a  total  of  9,540  retail  stores 
engaged  in  the  distribution  of  foodstuffs  in  Philadelphia ; 

70 


CONTROLLABLE  ELEMENTS  71 

or,  including  service  to  some  of  the  outlying  territory,  an 
average  of  about  i  to  each  135  of  the  population. 

Grouping  these,  it  will  be  seen  that  there  are  490 
chain  stores  controlled  by  six  companies;  700  smaller 
retail  stores,  cooperating  through,  if  not  largely  con- 
trolled by,  a  central  association;  and  8,350  small  "inde- 
pendent" stores.  Comparing  the  three  groups,  we  find 
that  5  per  cent,  are  chain  stores,  7  per  cent,  are  members 
of  the  Retail  Grocers'  Association  and  88  per  cent,  are 
small,  independent,  corner  grocers. 

Whether  the  upward  limit  of  retail  prices  is  fixed 
by  the  two  first-named  groups,  because  they  sell  in  larger 
quantities  and  are  represented  in  all  the  various  sections 
of  the  city  and  thus  can  set  standards  that  the  unasso- 
ciated  retailer  cannot  set,  or  whether  the  upward  limit  is 
fixed  by  a  subsistence  wage  on  the  part  of  these  small, 
independent  stores,  is  a  mooted  question  and  one  that 
cannot  be  settled  arbitrarily.  There  is  no  doubt,  however, 
that  minimum  prices  to  the  consumer  are  fixed  by  the 
cost  of  keeping  up  the  average  small,  inefficient  store 
throughout  the  city.  Many  of  the  owners  of  these  stores 
in  Philadelphia,  and,  as  the  report  of  the  New  York 
Investigating  Commission  shows,  many  of  these  stores 
in  New  York  City  as  well,  are  merely  making  wages. 
Many  of  them  each  year  go  into  bankruptcy. 

It  seems  equally  clear,  too,  that  the  chain  stores  and 
the  associated  retail  stores,  as  well  as  the  largest  of  the 
independent  stores,  are  making  goodly  profits.  As  a  rule, 
it  appears,  from  the  evidence  everywhere,  that  these 
classes  of  stores  are  keeping  prices  up  to  the  level  fixed 
by  subsistence  returns  to  the  small  storekeeper.  No  stu- 
dent of  the  problem  feels,  for  instance,  that  the  "chain" 
stores  are  charging  a  "just"  price  in  the  sense  that  they 
charge  the  lowest  price  that  would  give  them  a  reason- 
able profit  But  for  the  chain  stores  to  lower  their 


72  LOWER  LIVING  COSTS  IN  CITIES 

prices  further  would  mean  the  driving-out  of  the  small, 
independent  store.  This  they  could  unquestionably  do, 
because  of  the  economies  incident  to  the  chain  store 
method  of  retailing  foodstuffs.  It  is  estimated  that  200 
great  food  stores  for  New  York  City  could  make  a  profit 
over  the  existing  20,000  small  stores  of  $60,000,000  an- 
nually. 

The  chain  stores  became  a  vital  factor  in  Philadelphia 
about  1895.  Their  success  has  been  due,  first,  to  their 
cash  sales;  second,  to  their  elimination  of  losses  through 
bad  debts  and  the  resultant  quick  turnover  of  capital — 
in  order  to  keep  his  customers  the  corner  groceryman 
feels  forced  to  give  credit  and  hence  has  heavy  losses 
through  bad  debts;  third,  their  ability  to  purchase  their 
goods  in  large  quantities  direct  from  the  jobber,  manu- 
facturer or  producer — most  chain  stores  are  buying  di- 
rectly, and,  having  their  own  storage  facilities,  can  do  so 
with  great  savings;  fourth,  economies  in  distribution 
within  the  city — located  in  all  sections  of  the  city,  de- 
liveries can  be  made  largely  by  the  pushcart,  while  the 
heavier  deliveries  from  terminal  to  supply  houses  and 
from  the  central  store  to  the  branches,  can  be  made  with 
heavy  motor  trucks,  hence  these  savings  are  of  no  small 
significance;  fifth,  economies  in  central  management  and 
through  central  employing  and  purchasing  agencies.  It 
seems  clear  that  through  these  economies  and  savings 
the  chain  stores  can  conduct  their  business  at  a  cost  of 
at  least  20  to  25  per  cent,  less  than  can  the  unassociated 
retailer.  These  profits  thus  far  have  gone  largely  into 
advertising,  into  multiplying  stores  and  into  increasing 
invested  capital  rather  than  into  lower  retail  prices. 

Lower  retail  costs  for  the  future  will  necessitate  either 
the  driving  out  of  the  small  groceryman,  through  the 
lower  prices  of  the  chain  and  larger  retail  stores,  or  the 
securing  to  the  corner  groceryman,  by  municipal,  state 


CONTROLLABLE  ELEMENTS  73 

and  local  action,  the  economies  and  savings  now  enjoyed 
by  the  centrally  managed  concern.  If  the  former  is  done 
and  our  food  supply  placed  in  the  hands  of  a  few  con- 
cerns which  could  easily  make  agreements  as  to  prices, 
there  would  then  have  to  be  price  regulation  by  an  in- 
dustrial commission. 

Before  discussing  this  and  other  methods  for  control- 
ling prices,  and  for  lowering  the  costs  incident  and  neces- 
sary to  retailing  foodstuffs,  it  will  be  well  to  get  at  some 
of  the  costs  which  consumers  are  now  paying  and  which 
are  in  no  sense  legitimate  or  necessary.  The  abuses  and 
practices  by  which  retailers  are  now  adding  an  undue 
and  improper  toll,  both  upon  the  honest  retailer  and  the 
consumer,  may  be  classified  as : 

1.  Dishonest  weights  and  measures. 

2.  Adulteration  and  deterioration  of  foods. 

3.  Misbranding  and  misrepresentation. 

4.  Forestalling,  regrating  and  higher  prices  on  neces- 
sities. 

5.  Price  agreements  and  monopolies. 

One  method  of  raising  prices  while  apparently  keeping 
them  constant  or  the  same  as  those  asked  by  competitors 
is  to  sell  commodities  at  under-weight  or  to  measure  and 
pack  falsely.  In  this  class  of  abuses  is  the  custom  prac- 
ticed by  some  poultry  jobbers  of  feeding  poultry  a  mix- 
ture of  sand  and  stale  bread  in  order  to  increase  their 
weight;  and  the  measuring  of  articles  sold  by  dry  meas- 
ure in  liquid  measures — a  difference  of  9.45  cubic  inches 
in  each  quart  measure. 

The  Bureau  of  Municipal  Research  in  Philadelphia, 
by  testing  weights  and  measures  in  that  city,  found  that 
only  one  out  of  fifteen  tests  of  coal  showed  a  full  legal 
ton  of  2,240  pounds,  that  forty-six  out  of  fifty  tests  for 
groceries  and  150  out  of  200  tests  of  dry  goods  were 
short  in  measure.  Mr.  William  L.  Waldron,  Superin- 


74  LOWER  LIVING  COSTS  IN  CITIES 

ten  dent  of  the  New  Jersey  State  Department  of  Weights 
and  Measures,  in  a  recently  issued  pamphlet,  points  out 
102  different  means  by  which  dealers  give  short  weights 
and  measures.  The  Department  of  Weights  and  Meas- 
ures of  New  York  State  found  in  its  first  preliminary 
investigation  that  but  53  per  cent,  of  the  scales,  48  per 
cent,  of  weights  and  48  per  cent,  of  measures  were  cor- 
rect; now,  as  a  result  of  the  work  of  this  Department, 
84  per  cent,  of  the  weights  and  83  per  cent,  of  the  meas- 
ures are  found  to  be  correct. 

These  practices  gain  acceleration  through  use.  Each 
retailer  is  under  pressure  to  keep  up  his  profits  by 
adopting  the  methods  of  his  less  conscientious  com- 
petitor. The  very  nature  of  these  abuses,  therefore, 
necessitates  governmental  action  in  order  to  eliminate 
or  reduce  them.  For  the  protection  both  of  the  reliable 
dealer  and  the  consumer  honest  competition  must  be 
enforced. 

The  place  to  begin  is,  no  doubt,  with  the  producer. 
He  must  be  made  to  see  the  advisability  of  packing  and 
sorting  honestly.  The  place  to  end,  no  doubt,  is  with  the 
consumer.  He  must  be  taught  to  buy  with  intelligence 
and  in  such  a  way  as  to  minimize  the  temptation  to  de- 
ceive: for  example,  to  buy  groceries,  meats,  vegetables, 
etc.,  by  the  measure  or  numerically,  not  by  the  amount 
he  wishes  to  spend;  that  is,  a  "peck  of  potatoes,"  not 
"thirty  cents'  worth,"  "ten  pounds  of  sugar,"  not  "fifty 
cents'  worth."  But  to  guard  food  products  on  their  way 
from  producer  to  consumer  there  still  remains  the  ne- 
cessity for  (i)  virile  bureaus  of  weights  and  measures 
in  each  city  of  any  size;  (2)  a  state  bureau  for  the  pro- 
tection of  dealers  and  consumers  in  the  smaller  cities 
and  to  enforce  honest  standards  on  goods  sent  in  inter- 
state trade;  and  (3)  a  national  law  and  bureau  for  the 
protection  of  articles  sent  in  interstate  trade. 


CONTROLLABLE  ELEMENTS  75 

Pittsburgh's  local  Bureau  of  Weights  and  Measures 
claims  to  have  saved  to  consumers  at  least  $1,575,000 
during  the  first  year  of  operation.  The  New  York  and 
the  New  Jersey  state  bureaus  have  also  saved  large 
amounts  to  consumers.  The  New  York  bureau  esti- 
mates that  it  has  saved  to  the  people  of  the  state  a  total 
of  $15,000,000. 

Suggestive  of  other  savings  and  other  fields  for  gov- 
ernmental activities  is  the  recently  enacted  national  law 
(approved  March  3,  1913)  requiring  manufacturers  to 
print  the  net  weight,  measure  or  numerical  count  of  the 
contents  of  all  packages  put  into  interstate  trade.  New 
York,  North  Dakota  and  Nebraska  also  have  statutes 
requiring  net  contents  to  be  shown  on  alh  containers. 
The  New  Jersey  Department  of  Weights  and  Measures 
requires  the  net  contents  to  be  stated  on  all  milk  bottles ; 
to  facilitate  inspection,  each  dealer  in  milk  is  given  a 
number  which  must  appear  on  his  bottle.  There  is 
special  need  for  requiring  the  net  weight  to  be  stated  on 
brand  goods.  Many  cereals  were  first  put  up  in  two- 
pound  packages  to  be  retailed  at  ten  cents;  after  sales 
were  assured,  the  contents  were  reduced  to  twenty  ounces 
but  still  sold  at  ten  cents.  A  i6-ounce  package  of  Lion 
Brand  Wool  costs  $1.50;  a  14-ounce  package  of  Pansy 
Brand  Wool  costs  the  same.  By  knowing  the  net  weight 
the  purchaser  can  save  12^2  per  cent. — goodly  interest 
certainly. 

By  proper  civic  action,  the  heavy  costs  now  paid  by 
consumers  through  dishonest  weights  and  measures  can 
be  reduced  to  a  minimum  and  food  costs  thereby  ma- 
terially lowered.  It  should  be  noted  here  that,  in  addi- 
tion to  lowering  living  costs,  such  statutes  will  win 
further  confidence  in  standardized  and  brand  products 
and  hence  accelerate  the  tendency  toward  direct  selling 
discussed  in  the  succeeding  chapter.  Thus  the  national 


76  LOWER  LIVING  COSTS  IN  CITIES 

law  (approved  August  3,  1912)  establishing  a  standard 
barrel  and  a  standard  grade  for  apples  when  packed  in 
barrels  has  encouraged  direct  shipments  and  has  elim- 
inated much  needless  risk,  re-sorting  and  repacking. 

A  second  class  of  temptations  to  which  the  retailing 
world  is  heir,  and  to  which  all  too  many  succumb,  is 
that  of  adulterating  foods,  substituting  one  quality  for 
another,  and  using  like  methods  for  selling  goods  of 
lowered  if  not  harmful  food  value.  To"  be  sure,  here, 
too,  responsibility  also  rests  upon  the  producer  and  the 
manufacturer.  The  responsibility  on  the  consumer, 
however,  is  less  than  with  dishonest  weights  and  meas- 
ures, for  it  is  quite  beyond  the  power  of  the  purchaser 
to  ferret  out  the  larger  percentage  of  food  adulteration. 
Thus  during  a  single  year  the  Pure  Food  Bureau  in  the 
United  States  Department  of  Agriculture  uprooted  more 
than  two  hundred  ways  of  cheating  the  public  through 
food  adulteration  and  deterioration.  The  cost  of  admin- 
istering the  national  food  and  drugs  acts  and  the  di- 
visions and  bureaus  pertaining  thereto  is  approximately 
$700,000  per  annum.  The  expenditures  for  this  purpose 
in  the  various  states  differ  greatly,  ranging  from  $7,000 
(estimated)  in  New  Hampshire,  with  a  population  of 
430,572,  to  $92,967.47  in  Illinois,  with  a  population  of 
5, 638,59 1.1  In  addition  to  these  state  outlays,  many 
cities  expend  large  amounts  in  enforcing  their  pure  food 
laws.2  The  states  and  the  national  governments  alone 

1  Some  other  state  expenditures  worthy  of  note  are :  Minne- 
sota (1912),  $62,728.71;  Iowa  (1913),  $53,698.08;  Virginia  (1913), 
$43,030.96;  California  (1913-14),  $24,941.43;  New  Jersey  (1914 
appropriation),  $24000;  Missouri  (1913),  $20,727.82;  Connecticut 
(1912),  $20,250.45;  Texas  (1914  appropriation),  $14,600. 

*  Following  are  some  city  expenditures:  Newark  (1913),  $16,- 
467.58;  Oakland,  Cal.  (1913),  $27,695.36;  Philadelphia  (1913). 
$26,648.64;  San  Francisco  (1913-14),  $46,196.44;  Toledo,  Ohio 
(1914),  $7,325.00;  Topeka,  Kansas  (1914),  $4,440. 


CONTROLLABLE  ELEMENTS  77 

are  now  spending  $1,100,000  annually  to  stay  the  hand 
of  greed  from  polluting  and  harmfully  adulterating  the 
nation's  food  supply.  Adequate  protection  to  the  con- 
sumer means  constant  and  virile  enforcement  of  city, 
state  and  national  pure  food  laws  and  the  hearty 
cooperation  of  city,  state  and  national  pure  food 
bureaus. 

The  activities  of  health  and  pure  food  bureaus,  be  they 
city,  state  or  national,  must  be  not  only  restrictive  but 
increasingly  constructive  as  well.  Consumers  must  be 
taught  the  deleterious  effects  of  adulterated  foods,  can- 
dies and  drugs ;  while  the  manufacturers  and  producers 
must  be  shown  how  to  preserve  their  foods  by  economic 
but  harmless  methods.  One  illustration  is  pertinent. 
The  acid  in  string  beans,  by  action  upon  the  tin  in 
which  these  vegetables  are  canned,  gives  to  the  beans 
a  pleasing,  uniform,  light  green  color,  but  unhappily 
makes  them  unwholesome  for  food.  To  eliminate  this 
unwholesomeness  the  United  States  Department  of  Ag- 
riculture prevailed  upon  several  leading  canneries  to  use 
a  tin  can  so  coated  on  the  inside  as  to  be  impervious  to 
the  action  of  the  acid.  The  result  was  a  string  bean 
wholesome  for  food  but  spotted  and  unsightly  in  ap- 
pearance. These  unsightly  though  wholesome  beans  the 
housewife  refused  to  buy  and  insisted  upon  the  pretty 
green,  poisoned  beans.  The  business  interests  of  these 
canneries  at  once  suffered  heavily.  Here  was  a  place 
where  nothing  but  a  nation-wide,  educational,  construc- 
tive campaign  would  suffice.  Similar  constructive  ac- 
tivities must  be  assumed  by  all  food  and  health 
bureaus. 

Quite  akin  to  the  adulteration  and  deterioration  of 
foods  is  misbranding  or  misrepresentation  of  quantity 
or  quality.  These  subjects  have  usually  been  covered 
by  the  same  statutes  that  aim  at  adulteration  and  de- 


78  LOWER  LIVING  COSTS  IN  CITIES 

terioration.  The  national  law  declares  "all  drugs  or 
articles  of  food,  or  articles  which  enter  into  the  composi- 
tion of  food"  to  be  misbranded  if  the  package  or  label 
bears  "any  statement,  design,  or  device  regarding  such 
article,  or  the  ingredients  or  substances  contained  therein, 
which  shall  be  false  or  misleading  in  any  particular,  and 
.  .  .  any  food  or  drug  product  which  is  falsely  branded 
as  to  the  State,  Territory,  or  country  in  which  it  is  manu- 
factured or  produced." 

There  is  need  for  the  extension  of  this  national  law 
to  include  fabrics  and  similar  goods.  Happily  the  pres- 
ent administration  has  interpreted  the  national  pure  food 
law  to  include  the  misbranding  and  adulteration  of  all 
meats  or  meat  products  in  interstate  or  foreign  com- 
merce. These  meat  products  were  formerly  held  to  be 
under  national  inspection  before  shipment  only  and  not 
after  they  had  left  the  federally  inspected  establishment. 
Now  it  is  a  criminal  act  to  put  into  interstate  commerce 
any  adulterated  or  misbranded  meats.  Meats  so  mis- 
branded  or  adulterated  can  be  seized  at  any  time  before 
they  become  technically  intrastate  goods. 

While  the  national  law  prevents  much  misbranding 
as  to  the  contents  or  weight  of  a  food  package,  it  is  still 
possible  to  put  either  a  fifty-cent  or  a  fifteen-cent  label 
on  exactly  the  same  quality  of  any  package  goods. 

One  glaring  type  of  misrepresentation  during  recent 
years  has  been  the  sale  of  storage  goods  as  fresh.  Here 
again  responsibility  must  first  be  placed  upon  the  pur- 
chaser, for  the  chief  cause  of  this  particular  kind  of 
misrepresentation  is  the  deep-seated  belief  on  the  part 
of  housewives  that  cold  storage  goods  are  not  as  whole- 
some as  fresh.  This  is  another  field  for  constructive 
work  on  the  part  of  pure  food  and  health  bureaus.  The 
housewife  must  come  to  see  that  the  probabilities  are  that 
the  cold  storage  variety  is  more  wholesome  than  the 


CONTROLLABLE  ELEMENTS  79 

fresh.  Butter  is  as  wholesome  at  the  end  as  at  the  be- 
ginning of  a  year's  storage.  There  is  greater  deteriora- 
tion in  an  egg  brought  in  on  a  warm  day  from  a  farm  a 
few  miles  out  than  in  a  properly  collected,  chilled  and 
stored  egg  held  from  six  to  nine  months.  The  House- 
wives' League  of  Philadelphia  performed  a  service  of 
greatest  public  value  in  teaching  the  housewives  the 
value  and  wholesomeness  of  cold  storage  eggs  and 
the  extent  to  which  cold  storage  goods  have  been  sold 
as  fresh.  Dr.  Mary  E.  Pennington,  of  the  Federal  Re- 
search Laboratory,  has  done  yeoman  service  in  teaching 
the  value  of  cold  storage,  and  in  showing  the  relative 
wholesomeness  of  cold  storage  goods. 

There  is  clear  need  for  a  statute  requiring  cold  stor- 
age goods  to  be  clearly  marked  as  such.  Misrepresenta- 
tions not  only  deceive  the  consumer  and  induce  him  to 
pay  unnecessarily  high  prices  for  his  food,  but  are  un- 
fair to  the  farmer  and  retailer  who  are  selling  bona  fide 
fresh  goods.  Moreover,  such  legislation  will  lead  to 
sounder  practices  in  cold  storage  methods,  to  the  end 
that  such  foods  will  not  only  be  better  preserved  but 
more  palatable.  Palatability  is  a  vital  factor  in  food  dij. 
gestion  and  assimilation. 

As  there  has  been  in  recent  years  so  much  discussion 
as  to  the  proper  provisions  for  a  cold  storage  law,  there 
is  given,  in  the  appended  footnote,  a  summary,  both  of 
the  provisions  of  a  model  law  on  marking  cold  storage 
goods,  and  of  the  other  provisions  of  a  model  cold 
storage  law.1 

1In  1911  the  National  Association  of  Food  Officials  appointed 
a  committee  to  draw  up  a  model  cold  storage  law.  On  this 
committee  were  Mr.  Harry  Barnard,  Chief  Food  Commissioner 
of  Indiana,  and  Dr.  Mary  E.  Pennington,  the  leading  cold  stor- 
age expert  in  the  United  States.  The  statute  drawn  up  by  this 
committee  was  adopted  in  Indiana  and  is,  in  every  respect,  a 
model  law. 


8o  LOWER  LIVING  COSTS  IN  CITIES 

It  is  to  be  especially  noted  that  this  bill  requires  pub- 
licity as  to  the  holdings  in  cold  storage,  thereby  tending 

The  statute  applies  to  all  places  "artificially  cooled  to  a  tem- 
perature of  40°  F.  or  below,"  but  not  including  "such  a  place  in 
a  private  home,  hotel  or  restaurant,  or  refrigerator  cars." 
"Cold  stored"  is  defined  as  "keeping  'articles  of  food'  in  'cold 
storage'  for  a  period  exceeding  thirty  days."  It  further  provides 
that  the  operators  of  cold  storage  warehouses  shall  obtain  a 
license  from  the  State  Board  of  Health  for  conducting  their 
business  only  after  inspection  has  shown  the  warehouse  to  *be  in 
a  sanitary  condition.  In  case  the  warehouse  becomes  insanitary 
it  is  made  the  duty  of  the  State  Board  to  revoke  the  license. 
The  bill  provides  that  "an  accurate  record  of  the  receipts  and 
the  withdrawals  of  the  articles  of  food"  shall  be  kept  and  that 
the  State  Board  of  Health  "shall  have  free  access  to  these  rec- 
ords at  any  time,"  as  well  as  free  access  to  all  such  establish- 
ments. Each  person,  firm  or  corporation  operating  such  a  cold 
storage  plant  must  submit  to  the  State  Board  of  Health  at  least 
a  quarterly  report  "setting  forth  in  itemized  particulars  the 
quantity  of  products  held  in  cold  storage."  More  frequent  re- 
ports can  be  required  by  the  State  Board  at  will.  All  articles  of 
food  intended  for  human  consumption  must  be  prepared  for 
storage  in  accordance  with  the  pure  food  and  sanitary  laws  and 
with  the  rules  and  regulations  of  the  State  Board  of  Health. 
Foods  not  intended  for  human  consumption  must  be  marked  in 
such  a  way  as  to  indicate  clearly  that  fact.  All  articles  of  food 
when  deposited  must  have  marked  clearly  on  the  container  the 
date  when  they  are  deposited  in  cold  storage  and,  when  removed, 
the  date  of  removal.  The  limit  for  cold  storage  is  placed  at 
twelve  months,  save  by  special  permission  from  the  State  Board 
of  Health.  The  reason  for  granting  this  special  permission  must 
be  stated  in  the  Board's  annual  report.  As  goods  deteriorate 
irretrievably  when  once  taken  from  cold  storage,  it  is  made  un- 
lawful "to  return  to  cold  storage  any  article  of  food  that  has 
once  been  released  from  such  a  storage  and  placed  on  the  market 
for  sale  to  the  consumers."  It  is  especially  made  "unlawful  to 
sell,  or  to  offer  or  expose  for  sale,  uncooked  articles  of  food 
which  have  been  held  in  cold  storage  without  notifying  persons 
purchasing,  or  intending  to  purchase,  the  same  that  they  have 
been  so  kept  by  the  display  of  a  sign  marked  'Cold  Storage 
Goods  Sold  Here,'  and  it  shall  be  unlawful  to  represent  or  ad- 


CONTROLLABLE  ELEMENTS  81 

to  prevent  monopolistic  control  and  to  make  prices  more 
stable  by  giving  the  purchasing  public  information  as 
to  the  quantities  of  each  class  of  food  still  in  reserve. 
Worthy  of  equal  note  is  the  fact  that  the  time  limit 
is  twelve  months.  Some  recent  statutes  have  mis- 
takenly attempted  to  place  a  short  arbitrary  time  limit 
for  cold  storage.  And,  finally,  it  is  to  be  noted  that 
the  dealer  must  put  a  placard  on  all  cold  storage 
goods. 

The  fourth  class  of  practices  by  which  retailers  too 
often  add  improper  tolls  upon  food  costs  is  forestalling, 
regrating  and  placing  maximum  prices  on  food  neces- 
sities. Forestalling  and  regrating  have  long  been  known 
and  punishable  by  the  common  law.  The  common  law 
defines  forestalling  as  "the  buying  or  contracting  any 
merchandise  or  victual  coming  on  the  way  to  market, 
or  dissuading  persons  from  bringing  their  goods  or  pro- 
visions there,  as  making  the  market  dearer  to  the  fair 
trader" ;  violators  are  liable  to  both  fine  and  imprison- 
ment. The  old  English  law  defines  "regrating"  (5  and  6 
Ed.  I  Ch.  14)  as  "the  buying  of  corn  or  other  dead 
victual  in  any  market  and  selling  it  again  in  the  same 
market,  or  within  four  miles  of  the  place."  A  more 
modern  type  of  such  abuses  is  the  destruction  of  perish- 
able food  products  in  preference  to  selling  them  at  lower 
prices.  This  is  a  practice  all  too  common  among  the 
retailers  of  perishable  goods.  A  price  is  fixed  that  will 
bring  in  maximum  returns  and  goods  are  allowed  to 
perish  or  are  destroyed  rather  than  sold  at  a  lower  though 
profit-returning  price.  Instances  have  been  amply  veri- 
fied where  apples  have  been  bought  up  and  the  grower 
told  to  leave  them  at  a  certain  place,  where  they  have  been 

vertise  as  fresh,  articles  of  food  which  have  been  held  in  cold 
storage."  Heavy  fines  and  goodly  terms  of  imprisonment  await 
the  violators  of  the  act. 


82 


LOWER  LIVING  COSTS  IN  CITIES 


left  to  decay  unmoved.  The  burning  of  cotton  and  the 
attempt  of  the  Brazilian  government  to  force  up  coffee 
prices  by  buying  up  great  quantities  of  coffee,  are  recent 
examples  of  such  abuses  on  a  larger  scale. 

Another  sales  practice  is  to  raise  prices  on  certain 
necessities  of  life,  such  as  eggs,  poultry  and  butter,  in 
order  to  recuperate  from  the  lower  profits  incident 
to  selling  standard  brand  goods.  Brand  goods  are 
well  advertised  and  the  consumer  knows  not  only  their 
quality  but  also  their  price.  The  retailer,  unable  to 
advance  prices  on  these  goods,  is  sorely  tempted  to 
recuperate  profits  by  bolstering  up  prices  on  other 
articles,  such  as  butter  and  eggs,  which  people  must 
buy. 

The  retailer,  especially,  is  open  to  serious  temptation 
to  increase  his  returns  through  the  means  above  indicated, 
for  his  expenses  are  necessarily  large.  His  advertising 
expenses  are  growing.  Goods  must  be  done  up  in  neat 
packages  and  carefully  wrapped.  Solicitors  must  come 
to  the  door  to  learn  what  groceries  are  wanted.  Deliv- 
eries must  be  made,  often  totaling  one-half  the  expense 
of  the  article  and  adding  from  15  per  cent,  to  20  per  cent. 
to  the  retail  price.1  These  expenses  mean  that  the  city 

1  Some  idea  of  the  percentage  of  sales  that  goes  to  rent,  to  in- 
surance and  taxes,  and  to  wages  in  various  retail  businesses  will 
be  gleaned  from  the  following  table : 1 


!  Business 

Per  Cent,  of 
Sales  to  Rent 

Per  cent,  to  In- 
surance and  Taxes 

Per  cent,  to  Wages 

Vehicle    or    implement 
stores  

2.12 

1.04 

9.41 

Grocery  stores  

2.O7 

.58 

7.96 

3.98 

1.32 

Drug  stores  

4.O2 

I.  21 

Furniture  stores  

3./M 

1.57 

8.73 

Variety  stores  

4.41 

-98 

8.86 

Department  stores  

3.91 

I.OI 

lSee  System,  January,  1914,  pp.  19,  20,  24. 


CONTROLLABLE  ELEMENTS  83 

must  take  constructive  measures  to  lower  freight  and 
cartage  costs  to  the  retailer  and  to  give  him  other  fa- 
cilities essential  to  his  work.  Simply  because  expenses 
are  large  is  no  justification  for  their  being  taken  from 
the  consumer  in  ways  surreptitious  and  by  means  more 
or  less  harmful  in  their  effects. 

The  fifth  abuse  by  retailers  is  the  making  of  price 
agreements  and  the  attempt,  too  often  successful,  to 
secure  monopoly  prices  by  written  agreements  or  by 
mutual  understandings.  Philadelphia  retailers  have  sev- 
eral times  attempted  to  set  the  price  on  certain  articles 
by  agreement.  More  than  once  it  has  been  clearly  shown 
in  the  New  York  courts  that  the  milk  dealers  in  New 
York  City  were  agreeing  upon  the  price  to  be  charged  for 
all  milk  sold  within  the  city.  The  Attorney-General  of 
the  State  of  New  York  investigated  the  milk  business 
of  New  York  City  late  in  the  year  1909  to  ascertain 
whether  or  not  there  was  in  existence  a  combination 
among  milk  dealers  to  restrain  trade.  He  found  that 
there  was  a  milk  exchange  which  fixed  the  price  on  prac- 
tically all  milk  going  to  New  York  City.  "The  result 
is  that  the  producer  is  compelled  to  sell  his  milk  to  one 
of  these  large  companies  at  a  price  arbitrarily  fixed  by 
them,  and  published  by  them  six  months  in  advance,  or 
to  the  exchange,  an  organization  of  New  York  City 
dealers,  at  a  price  arbitrarily  fixed  by  them.  The  only 
other  recourse  remaining  to  the  producer  is  to  ship  his 
milk  to  unknown,  and  oftentimes  irresponsible,  dealers." 
As  has  been  pointed  out  previously,  it  is  entirely  pos- 
sible for  the  chain  stores  now  to  set  the  standard  of 
prices  within  any  large  city,  and  certainly  it  is  easy  for 
the  retailers  in  the  smaller  city  to  combine  upon  a  given 
price. 

Of  special  significance  in  recent  years  has  been  the 
rapidly  increasing  tendency  for  manufacturers  to  set  the 


84  LOWER  LIVING  COSTS  IN  CITIES 

prices  at  which  their  own  goods  are  to  be  retailed.  A 
score  or  more  years  ago  the  manufacturer  paid  little  or 
no  heed  to  the  prices  at  which  his  goods  were  to  be  sold. 
With  the  phenomenal  development  in  advertising,  and  in 
the  various  other  means  of  reaching  the  purchaser,  how- 
ever, the  manufacturer  began  to  solicit  nation-wide  trade 
and  to  increase  profits  by  making  a  "standard"  article, 
sold  everywhere  at  the  same  "standard"  price.  These 
price  agreements  are  not  legal,  under  the  Sherman  Act, 
even  though  the  articles  are  patented.  "This  package  of 
,"  so  runs  a  typical  agreement  by  which  the  manu- 
facturer seeks  to  set  the  retail  price  under  the  guise  of 
protecting  his  patent,  "is  licensed  by  us  for  sale  at  a  price 
not  less  than  fifty  cents.  Any  sale  in  violation  of  this 
condition  when  so  sold  will  constitute  an  infringement  of 
our  patent  No.  —  and  manufacturers  and  all  persons  so 
selling  or  using  the  package  or  contents  will  be  liable  to 
this  condition.  A  purchase  is  an  acceptance  of  this 
condition."  Oftentimes  the  retailer  must  also  agree  not 
to  sell  any  other  brand  of  goods  of  the  same  kind. 
Candy  manufacturers  set  retail  prices  by  slipping  a  card 
in  the  package  setting  forth  the  price  at  which  the  pack- 
age can  be  sold.  As  costs  vary  in  producing  such  stand- 
ard goods,  the  price  often  remains  steadfast  while  the 
weight  or  content  of  the  package  changes. 

But  fixing  prices  by  manufacturers'  agreements  under 
the  patent  laws  has  recently  been  held  (May  26,  1913) 
by  the  United  States  Supreme  Court  to  be  illegal.  This 
decision  holds  that  the  ownership  of  a  grant  of  patent 
does  not  give  to  the  patentee  the  right  to  impose  upon 
the  purchaser  of  his  goods  any  obligation,  after  such 
purchase  has  been  made,  to  sell  goods  only  at  the  price 
named  by  the  patentee.  The  patentee's  right  to  fix  prices 
is  limited  to  his  first  sale.  Price  agreements  in  the  future 
will,  under  this  decision,  until  other  statutes  are  passed 


CONTROLLABLE  ELEMENTS  85 

or  decisions  made,  have  to  be  by  such  means  as  the  in- 
closing of  a  card  as  noted  above  or  "the  education"  of 
the  consumer. 

Many  feel  that  this  decision  of  the  Supreme  Court  is 
not  in  the  best  interests  of  the  consumer.  They  point 
out  that  price-cutting  is  most  effectual  as  an  advertising 
medium  on  goods  of  a  known  price  and  value  and  that, 
therefore,  the  better  known  the  goods,  and  hence  prob- 
ably the  better  the  goods,  the  greater  the  abuse  of  the 
price-cutting  practices  by  stores  that  wish  to  draw  trade. 
They  point  to  the  fact  that  such  price-cutting  is  pro- 
hibited by  certain  recent  statutes.  Thus  New  Jersey  in 
April,  1913,  passed  a  law  forbidding  "for  the  purpose 
of  attracting  trade  the  appropriation  of  brands,  names, 
reputation  or  goodwill,  by  deprecating  the  value  of  such 
products  in  the  public  mind,  or  by  misrepresentation  as  to 
value  or  quality,  or  by  price  inducement."  In  June,  1912, 
Denmark  passed  a  law  fining  those  "who  sell  or  offer 
for  sale  goods  in  original  wrappers  from  producers  or 
jobbers,  upon  which  their  fixed  price  for  the  retail  trade 
has  been  indicated  at  a  lower  price"  (except  damaged 
goods,  removal  or  retiring  from  business)  "save  by  per- 
mission of  maker  or  jobber." 

It  is  difficult  to  see,  however,  how  there  can  be  any 
control  over  the  upward  limit  of  consumers'  prices  if 
the  manufacturer  is  allowed  to  set  his  own  price,  or,  in 
other  words,  limit  the  amount  of  profit  that  each  retailer 
must  make  regardless  of  his  individual  costs.  Such  price 
agreements  would  often  be  inimical  to  the  best  interests 
of  the  retailer  and  the  consumer.  Certainly  if  the  manu- 
facturer or  producer  is  to  be  allowed  to  set  his  own  price, 
then  there  must  be  created  an  industrial  commission  with 
full  powers  to  approve  such  prices  as  are  reasonable  and 
with  other  powers  similar  to  those  given  to  public  service 
commissions  over  quasi-public  utilities. 


86  LOWER  LIVING  COSTS  IN  CITIES 

The  abuses  above  indicated  are  of  sufficient  serious- 
ness to  warrant  not  only  the  corrective  measures  and 
activities  indicated  above  but  certain  constructive  ac- 
tivities as  well.  They  are  deep-seated  in  the  very  nature 
of  the  business.  To  more  completely  eradicate  them 
and  to  make  the  way  for  lower  food  costs,  means  and 
plans  other  than  those  above  considered  are  worthy  of 
serious  consideration.  These  are: 

1.  Consumers'  cooperation.     This  will  not  only  give 
a  reliable  avenue  for  distribution,  but  will  also  give  to 
consumers  everywhere  reliable  information  as  to  what 
retail  prices  can  reasonably  be.     This  subject  is  further 
discussed  in  the  chapter  on  What  Consumers'  Coopera- 
tion Has  Accomplished. 

2.  Producers'  cooperation.    The  effectiveness  of  this 
method  in  getting  better  prices  to  producers,  in  stand- 
ardizing packages,  in  lowering  food  costs  by  more  direct 
sales,  and  in  getting  better  produce  to  consumers,  is 
discussed  in  Chapter  XL 

3.  A  shorter  route  from  -producer  to  consumer  where- 
by there  may  be  lower  cost  to  retailers  as  well  as  to 
consumers.     To  this   subject  the   following  chapter  is 
devoted. 

4.  Municipal  markets  and  other  means  of  direct  mar- 
keting.     Chapter  X   discusses  in   full   this   agency   for 
bringing  producer  and  consumer  together  and  for  secur- 
ing competition  under  high  standards  of  governmental 
and  community  inspection. 

5.  Other   governmental   and   civic   provisions.     The 
chapter  on  A  City  Program  for  Lower  Food  Costs  dis- 
cusses still  other  governmental  and  civic  steps  that  may 
be  taken  to  lower  food  distribution  costs,  to  eliminate 
deterioration  and  to  give  to  retailers  better  service  at 
lower  prices  and  to  consumers  better  goods  at  more  rea- 
sonable prices. 


CONTROLLABLE  ELEMENTS  87 

In  addition  to  these  means  there  remain  four  to  be 
discussed  here:  (i)  public  ownership  and  operation; 
(2)  price  regulation  by  an  industrial  commission;  (3) 
publicity,  and  (4)  the  education  of  the  purchaser. 

Public  ownership  is  urged  by  some  as'  the  only  solu- 
tion of  the  problem.  It  is  held  that  through  public  own- 
ership only  can  the  motive  for  higher  prices  and  the 
characteristic  retailers'  abuses  be  eliminated  and  in  their 
stead  be  substituted  a  desire  to  serve  for  social  approval. 
This  scheme,  however,  is  as  yet  little  more  than  a  wish, 
and  that  on  the  part  of  but  few  of  our  people.  The  cost 
of  the  venture  alone  puts  it  out  of  the  question  for  the 
time  being. 

A  second  method  is  the  creation  of  a  price-fixing  in- 
dustrial commission  with  power,  not  only  to  prevent  the 
abuses  above  described,  but  also  to  fix  food  prices.  It 
is  proposed  that  this  commission  be  endowed  with  powers 
similar  to  those  exercised  by  a  public  service  commission 
over  the  rates  and  service  of  common  carriers  and 
municipal  utilities. 

Should  the  food  retailing  business  of  our  cities  be 
controlled  in  the  future  by  a  very  few  large  companies, 
a  price-fixing  commission  will  not  only  be  desirable  but 
essential  for  the  protection  of  the  public.  If  present 
tendencies  toward  centralized  control  and  price  agree- 
ments by  manufacturers  and  retailers  continue,  regula- 
tion by  an  industrial  commission  is  only  a  matter  of 
time. 

But  considerable  time  must  elapse  before  our  national 
and  state  governments  will  extend,  if  at  all,  social  control 
over  the  maximum  prices  of  foodstuffs,  through  such 
price-fixing  commissions.  In  the  meantime,  however, 
steps  can  be  taken  and  are  now  being  taken  whereby 
publicity  commissions,  thus  far  created  in  the  name  of 
market  bureaus  or  .industrial  commissions,  can  give  pub- 


88  LOWER  LIVING  COSTS  IN  CITIES 

licity  both  as  to  wholesale  prices  and  retail  prices  and 
thus  wield  almost  as  great  powers  as  they  could  if  en- 
dowed with  compulsory  powers.  Public  information  of 
this  character  will  be  of  inestimable  value  to  both  pro- 
ducer and  consumer;  it  would  prove  a  most  wholesome 
deterrent  to  any  retailer. 

Of  poignant  supplementary  power  even  after  such 
commissions  or  bureaus  are  established  and  of  inesti- 
mable value  before  they  are  established  is  the  work  of 
various  leagues  of  housewives.  As  nine-tenths  of  the 
retail  buying  is  done  by  women,  such  organizations 
have  been  and  ever  will  be  of  inestimable  social  value  if 
they  do  nothing  more  than  they  have  done — make  and 
keep  the  housewife  conscious  of  her  power.  While  hu- 
man nature  is  human,  the  retailer  cannot  be  the  only 
source  of  information  open  to  the  housewife  if  she  is 
to  buy  economically  and  reliably.  The  housewives' 
league  will  do  yeoman  service  to  every  consumer  if  it 
but  continues  to  cry  out  abuses  and  extortionate  prices. 

High  retailing  costs  will  continue  as  long  as  there  is 
ignorant  and  careless  purchasing.  The  final  solution  for 
the  elimination  of  abuses  must  ever  be  careful  and  in- 
telligent buying.  The  best  laws,  the  most  virile  inspec- 
tion, the  most  careful  price-fixing  can  never  reach  their 
maximum  usefulness  until  every  housewife  is  a  law 
expositor  and  price-fixer.  The  women  of  our  great 
middle-class  spend  nine-tenths  of  the  total  family  in- 
come. Why  train  men  to  produce  if  women  are  to  ig- 
norantly  or  carelessly  waste  what  men  earn  ?  As  the  old 
proverb  has  it,  many  a  day  laborer's  wife  "throws  more 
out  the  back  door  with  a  spoon  than  her  husband  can 
bring  in  the  front  door  with  a  shovel." 

Let  one  illustration  suffice  as  to  intelligent  buying. 
Many  housewives  have  demanded  and  still  do  demand 
wet-packed  in  preference  to  dry-packed  poultry.  As  a 


CONTROLLABLE  ELEMENTS  89 

matter  of  fact,  the  latter  is  more  wholesome  and  con- 
tains more  nutrition  than  the  former.  In  the  routine  of 
marketing  wet-packed  poultry,  about  three  hundred 
pounds  of  soluble  proteins  and  nitrogenous  extractives 
for  each  carload  of  poultry  go  down  the  sewer,  while 
the  consumer  pays  chicken  prices  for  1,300  pounds  of  ab- 
sorbed water.  Facts  such  as  these,  driven  forcefully 
home,  can  make  out  of  us  a  different  kind  of  a  purchas- 
ing nation. 

In  our  schools  a  place  can  be  given  to  teaching  food 
values.  Salient  facts  as  to  food  values  are  certainly  as 
pertinent  and  as  good  mental  discipline  as  are  facts  about 
Caesar's  legions.  Buying  efficiently  and  hence  lower  liv- 
ing costs  can  be  furthered  in  no  more  direct  way  than 
by  systematic  instruction  in  food  values,  alike  in  our 
public  schools  and  civic  centers.  In  New  York  City, 
Mayor  Mitchel's  Food  Supply  Committee  is  doing  a 
service  of  great  suggestive  value  in  disseminating  pam- 
phlets on  such  subjects  as  "How  to  Cook  Fish"  and 
"How  to  Use  Left-overs." 

The  spending  of  nine  out  of  every  ten  dollars  of  the 
family  income  is  left  to  the  untrained  wife.  In  her 
helplessness  she  turns  the  job  over  to  the  grocer  clerk 
and  the  counter  girl.  When  she  is  an  efficient  pur- 
chaser the  family  income  will  not  only  be  conserved  but 
in  effect  increased. 


CHAPTER   VIII 

A   SHORTER   ROUTE  FROM   PRODUCER  TO  CON- 
SUMER 

The  same  economic  forces  that  have  made  toward 
stability  in  wholesale  prices  and  a  facile,  equalized  food 
supply  throughout  the  entire  country,  are  now  also  mak- 
ing for  a  shorter  route  from  producer  to  consumer.  For 
lowered  food  costs  this  is  one  of  the  most  significant 
and  hopeful  tendencies  of  the  twentieth  century. 

Until  relatively  recent  years,  the  typical  route  taken 
by  foodstuffs  was  indirect  and  costly.  The  farmer  carted 
his  products  to  the  country  merchant;  the  country  mer- 
chant sold  through  a  commission  merchant;  the  food 
was  freighted  to  the  city  terminal;  then  carted  to  this 
commission  merchant's  place  of  business ;  he  in  turn 
sold  to  speculators  and  jobbers,  and  the  food  was  carted 
to  their  respective  places ;  then  carted  to  storage  houses ; 
then  sold  and  carted  to  the  retailer  who  delivered  it  to 
the  consumer. 

As  contrasted  with  this  roundabout  and  costly  method, 
the  present  tendency  is  for  farmers,  middlemen  and  re- 
tailers alike  to  make  their  business  units  include  all  or 
at  least  several  of  the  steps  in  distribution.  Farmers 
are  organizing  in  cooperative  associations  to  sell  as  di- 
rectly as  possible;  the  commission  merchant  is  turning 
jobber  and  sending  his  own  agent  or  motor  truck  out 
into  the  country  to  buy  direct  for  his  own  stores :  the 
jobber  at  the  primary  market  is  buying  directly  from 
the  country  merchant  and  often  indeed  directly  from  the 

90 


SHORTER  ROUTE:  PRODUCER  TO  CONSUMER       91 

large  producer  and  then  selling  to  the  retailer;  the  re- 
tailer, typified  by  the  chain  stores,  is  extending  his  op- 
erations to  include  all  the  activities  in  distribution  from 
the  time  the  food  product  leaves  the  farm  or  garden 
until  it  reaches  the  consumer's  table.  A  decade  ago 
wholesale  commission  men  were  declaring  that  good 
"business"  required  that  retailers  buy  from  jobbers,  job- 
bers from  wholesalers,  wholesalers  from  country  mer- 
chants, and  country  merchants  from  farmers,  and  that 
any  and  all  attempts  to  eliminate  the  middleman  were 
destructive  of  all  good  business  principles.  This  was 
the  first  symptom  that  foodstuffs  were  being  routed  more 
directly. 

A  typical  example  of  this  tendency  toward  direct  buy- 
ing is  the  growing  method  of  marketing  eggs  through 
cash-buying  jobbers.  This  method  is  given  in  detail  in  a 
pamphlet  by  Professor  C.  W.  Thompson  entitled  "Tech- 
nical Studies  in  Egg  Marketing."  Formerly  the  country 
merchant  was  compelled  to  sell  solely  through  the  com- 
mission merchant  with  great  risk  and  with  practically 
no  opportunity  to  safeguard  his  sales  and  returns.  With 
the  improvements  in  transportation,  his  means  of  finding 
a  stable  market  multiplied,  the  egg  business  became  more 
secure,  and  cash-buying  jobbers  began  to  appear.  These 
jobbers  sent  agents  to  country  towns  to  buy  not  only 
eggs  but  poultry  as  well,  and  possibly  also  to  sell  to  the 
village  merchant  fruits  and  similar  foodstuffs.  Once  the 
village  merchant  could  sell  for  cash,  it  did  not  take  him 
long  to  transfer  his  business  from  the  commission  mer- 
chant to  the  jobber.  The  eggs  purchased  by  the  travel- 
ing agents  of  these  jobbers  or,  as  customers  became 
confident,  through  mail  quotations,  were  shipped  to  the 
jobbers'  headquarters,  and  there  candled,  graded  and 
sorted  for  the  local  retail  trade  or  packed  in  carload 
lots  for  shipment  to  other  markets  or  held  in  cold  stor- 


92  LOWER  LIVING  COSTS  IN  CITIES 

age  for  future  sales.  Large  numbers  of  first-class  eggs 
were  sold  directly  to  retailers,  good  hotels  and  restau- 
rants, while  "seconds"  were  sold  to  eating  houses,  inferior 
retail  firms  and  bakeries.  To  the  bakeries  were  sold  the 
"cracks"  and  "checks." 

The  economic  results  of  this  direct  method  of  sale  as 
compared  with  the  old  roundabout  method,  which,  un- 
fortunately, still  sets  the  standards  for  consumers'  prices, 
are  as  follows :  Under  the  direct  method,  Professor 
Thompson  found  that  where  the  local  farmer  received  21 
cents  a  dozen  for  his  eggs,  the  cash  buyer  sold  to  Duluth 
retailers  for  23  cents,  the  Duluth  retailer  paid  the  express 
charges,  which  approximated  I  cent  a  dozen,  and  sold 
to  the  consumer  for  29  cents.  This  was  an  increase  of 
consumers'  over  producers'  prices  of  33  1/3  per  cent. 
Quite  in  contrast  with  this  is  the  accumulation  of  charges 
on  eggs  sold  under  the  old,  more  roundabout  method. 
The  New  York  Market  Commission,  starting  with  the 
hypothetical  farmer's  price  of  20  cents,  found  the  ac- 
cumulation of  charges  to  be  as  follows:  The  shipper's 
charges,  including  labor  in  collecting  and  packing  eggs, 
and  transportation  charges  to  the  city  amounted  to  2.3 
cents  per  dozen ;  the  commission  for  handling  was  I  cent ; 
the  jobber's  charges,  including  cartage  from  dock  to 
store,  candling,  grading,  storage  and  insurance,  profit 
and  delivery  to  the  retailer,  were  3.8  cents ;  the  retailer's 
charges,  including  operating  expenses  of  10  per  cent,  and 
a  profit  of  5  per  cent.,  increased  the  cost  4.2  cents,  mak- 
ing the  consumer  pay  31.3  cents  a  dozen  for  the  eggs  for 
which  the  farmer  received  20  cents,  an  increase  of  56^ 
per  cent.  The  old  indirect  method  cost  23  per  cent,  more 
than  the  direct  method.  Jobbers  dealing  in  strawberries 
and  other  perishable  fruits  are  using  similar  methods. 
Their  professional  buyers  follow  the  season  northward 
and  are  most  potent  factors  in  the  wide  and  wise  dis- 


SHORTER  ROUTE:  PRODUCER  TO  CONSUMER   93 

tribution  of  such  produce.  Such  direct  buying  means 
greatly  reduced  food  costs. 

It  must  be  noted  here,  for  the  sake  of  completeness, 
that  there  are  still  marketing  conditions  where  the  com- 
mission business  tends  to  increase  and  jobbing  to  de- 
crease. During  a  period  of  rising  prices,  jobbing  is 
encouraged,  as  the  jobber  has  the  prospects  of  increasing 
profits  through  higher  prices;  but  when  the  price  is 
falling  the  jobber  is  constrained  to  hold  back  and  either 
turn  commission  man  himself  or  leave  the  field  to  estab- 
lished commission  houses.  On  the  whole,  however,  and 
increasingly  as  the  risk  diminishes  and  the  market  widens, 
the  tendency,  even  for  periods  of  falling  prices,  is  for 
direct  buying  and  selling. 

Direct  buying  is  growing  in  other  fields.  Agents  of 
large  merchants  go  to  farmers  on  the  Pacific  Coast  to 
buy  fruit,  to  ranches  in  the  Rocky  Mountains  for  wool, 
to  plantations  in  Louisiana  and  southeastern  Texas  for 
rice  and  to  the  orchards  of  Colorado  and  Oregon  for 
apples  and  other  fruits.  The  manufacturers  of  candies 
tend  to  sell  through  a  single  jobber  to  retailers.  Thus 
the  organizations  associated  with  the  National  Confec- 
tioners' Association,  representing  a  total  investment  of 
$100,000,000,  and  having  a  total  of  50,000  employees, 
sell  in  this  way  $150,000,000  worth  of  candy  yearly;  to 
this  the  retailer  adds  in  costs  and  profits  40  per  cent. 
The  manufacturers  of  brand  goods  and  standard  goods 
are  likewise  selling  through  only  one  jobber  and  often 
directly  to  the  large  and  reliable  retailer.  In  those  fields 
where  commission  business  still  prevails,  as  in  the  live- 
stock trade,  it  seems  clearly  established  that  lower  com- 
mission charges  are  being  made,  though  the  greater 
amount  of  business  and  the  smaller  risks  have  increased 
rather  than  decreased  maximum  returns  to  commission 
men. 


94  LOWER  LIVING  COSTS  IN  CITIES 

The  large  chain  stores,  the  larger  retail  stores  and 
combinations  of  smaller  corner  grocerymen  are  now 
buying  direct  to  a  rapidly  increasing  extent — either  from 
the  jobber,  from  the  country  merchant  or,  as  is  increas- 
ingly the  case,  from  the  producer  himself.  In  several 
cities  such  retailers  are  even  sending  their  own  motor 
trucks  out  to  gather  foodstuffs  direct  from  the  growers 
or  are  buying  and  equipping  their  own  steamers  and  gaso- 
line barges  to  carry  products  from  water-front  farms. 
One  concern  through  its  motor  line  taps  a  region  ninety 
miles  away;  another  collects  goods  from  all  the  farms 
about  the  city,  and  a  third,  a  chain  store,  through  its 
own  boats,  takes  practically  all  the  produce  from  a  pros- 
perous water-front  agricultural  section.  Such  direct 
buying  has  been  the  chief  reason  for  the  prosperity  of 
the  chain  stores.  Their  agents  are  to  be  found  in  all 
parts  of  the  country,  buying  directly  and  economically 
and  shipping  to  the  store's  headquarters  where  the  goods 
are  prepared  for  the  local  market.  The  large  retailers, 
in  order  to  insure  a  steady  supply  at  all  seasons  of  the 
year,  are  going  into  the  country  and  making  yearly  con- 
tracts with  high-class  producers  to  sell  to  them  all  their 
eggs.  The  price  paid  the  farmer  is  sometimes  placed  at 
from  two  to  five  cents,  and  in  rare  instances  ten  cents, 
above  the  market  price,  and,  therefore,  varies  with  the 
different  seasons  of  the  year.  Similar  contracts  are  made 
with  country  stores,  with  creamery  companies  and  with 
farmers'  associations.  In  Philadelphia  seven  hundred 
grocerymen,  the  so-called  Triangle  Stores,  have  incor- 
porated the  Girard  Grocery  Company,  through  which 
they  buy  directly  to  as  large  an  extent  as  possible. 

Another  twentieth  century  tendency  that  gives  hope 
for  lower  food  costs  is  the  movement  among  food  grow- 
ers to  organize  into  cooperative  societies  in  order  to  get 
maximum  prices,  to  eliminate  abuses  in  sales  and  to  in- 


SHORTER  ROUTE:  PRODUCER  TO  CONSUMER      95 

crease  profits  by  selling  as  near  to  the  consumer  as  pos- 
sible. These  organizations  make  it  possible  for  jobbers 
who  could  not  afford  to  buy  from  individual  farmers, 
to  still  buy  directly  from  the  producer.  Herein  lies  the 
most  promising  method  for  the  elimination  of  the  coun- 
try merchant  in  food  distribution.  It  is  the  long  holding 
and  the  improper  packing  by  these  local  middlemen  that 
cause  the  greatest  amount  of  food  deterioration.  The 
country  merchant,  in  order  to  hold  his  trade,  is  tempted 
to  continue  the  custom  of  buying  his  eggs  by  the  count 
and  not  "loss  off,"  that  is,  to  candle  and  return  to  the 
farmer  all  bad  eggs.  This  case  count  method  of  buying 
has  tended  to  perpetuate  carelessness  on  the  part  of  the 
farmer,  and  has,  therefore,  made  necessary  the  greater 
loss  and  unnecessarily  high  costs  for  regrading  and 
packing.  The  more  directly  the  farmer  sells,  the  more 
attention  he  must  pay  to  the  quality  and  standard  of  his 
goods.  Through  cooperation  producers  can  standardize 
their  goods.  Moreover,  by  selling  for  cash,  the  farmer 
is  encouraged  to  buy  his  goods  on  a  cash  basis  rather  than 
to  do  a  credit  business  with  the  local  merchant  with  low- 
ered costs  to  him.  To  these  and  other  results  to  be 
attained  through  producers'  cooperation,  a  special  chap- 
ter is  devoted. 

Of  like  significance  is  the  movement  among  consumers 
to  band  together  in  order  to  save  by  buying  directly  or 
by  lowering  costs  through  getting  honest  weights,  full 
measures,  and  reliable  goods  at  reliable  prices.  This 
movement  and  its  social  and  economic  effects  are  more 
fully  discussed  in  the  chapter  on  What  Consumers'  Co- 
operation Has  Accomplished. 

Still  another  method  of  shortening  the  route  from 
producer  to  consumer  is  the  encouragement  of  municipal 
markets  and  other  means  of  direct  marketing,  as  dis- 
cussed in  the  succeeding  chapter. 


96  LOWER  LIVING  COSTS  IN  CITIES 

There  are  many  other  ways  through  which  this  ten- 
dency toward  a  more  direct  routing  of  foodstuffs  can  be 
given  a  greater  impetus.  The  commission  merchant  and 
jobber,  who  persist  in  using  methods  inimical  to  the  best 
interests  of  the  reliable  middleman  as  well  as  the  pro- 
ducer and  retailer,  can  be  eliminated  by  the  regulative 
laws  discussed  in  Chapter  VI.  Publicity  through  house- 
wives' and  farmers'  organizations  will  further  tend  to 
eliminate  excessive  charges  and  prevent  abuses.  But 
more  to  the  point,  city,  state  and  national  market  bureaus 
can  promulgate  information  so  as  to  eliminate  the  risk 
in  finding  a  market,  thereby  reducing  costs  to  the  mid- 
dlemen themselves,  and  stimulating  direct  buying.  Pro- 
ducers can  sort  more  honestly  and  pack  more  reliably. 
Civic  action  can  further  the  proper  use  of  refrigeration 
and  cold  storage,  encourage  water  transportation,  perfect 
freight  service,  prevent  monopolistic  abuses,  and  take 
all  other  steps  essential  to  reducing  the  cost  of  shipping 
and  to  minimizing  the  risks  in  buying  and  selling — in 
short,  take  all  steps  necessary  to  confident,  reliable  mar- 
keting. And  finally,  the  city  can  establish  terminal 
wholesale  markets  where  goods  are  sold  by  licensed  pub- 
lic auctioneers  under  conditions  that  will  give  pro- 
ducers and  buyers  everywhere  confidence  in  that  city  as 
a  market  center.  Goods  will  then  be  consigned  more  and 
more  directly.  All  these  steps  ultimately  mean  a  distinct 
lowering  of  food  distribution  costs  to  the  great  enhance- 
ment of  commercial  transactions  and  lower  living  costs. 

A  shorter  route  from  producer  to  consumer  is  not  to 
be  desired  for  its  own  sake.  The  end  to  be  attained  is 
lower  distribution  costs.  This  fact  cannot  be  reiterated 
too  often.  Neither  is  there  any  desire  to  eliminate  mid- 
dlemen just  for  the  sake  of  eliminating  middlemen.  The 
end  to  be  attained  is  minimum  costs  consistent  with  effi- 
ciency. If  that  end  is  attained  by  the  existing  number 


SHORTER  ROUTE:  PRODUCER  TO  CONSUMER   97 

of  middlemen  or  even  a  greater  number  of  middlemen, 
let  us  have  them.  If  that  end  is  reached  by  the  elimina- 
tion of  the  number  of  hands  through  which  the  majority 
of  foodstuffs  pass,  then  that  elimination  will  be  wel- 
comed. 

Society  will  take  the  same  attitude  toward  middlemen 
as  it  has  toward  laborers  when  production  can  be  low- 
ered through  machinery.  The  laborer  has  been  left  to 
seek  other  employment.  So  will  the  middleman.  And 
just  as  "laborers"  are  needed  now  as  much  as  formerly, 
though  the  number  of  the  workers  through  which  a 
product  must  pass  for  its  completion  has  decreased,  so 
"the  middleman"  will  be  with  us  always,  though  in  di- 
minished numbers  working  with  a  distribution  process 
the  risks  and  costs  in  which  have  been  largely  eliminated 
through  individual,  cooperative  and  governmental  action. 


CHAPTER  IX 
AGENCIES   FOR  BETTER  LOCAL  DISTRIBUTION 

One  of  the  weakest  links  in  our  distribution  system 
is  the  inadequacy  and  inefficiency  of  existing  agencies 
for  local  distribution. 

The  cost  of  getting  goods  from  the  farm  to  the  ship- 
ping point  is  entirely  too  high.  Slightly  over  one  dollar 
in  twenty  of  the  entire  wholesale  value  of  farm  products 
goes  for  this  purpose.  Consumers  are  paying  many 
times  over  the  eighty-five  million  dollars,  and  more,  that 
our  farmers  are  spending  annually  in  marketing  their 
output. 

This  exorbitant  cost  has  a  large  number  of  baneful 
effects  on  producers'  output  and  returns,  and  on  the 
quality,  variety  and  cost  of  consumers'  goods.  The  farm 
owner  "within  three  miles  of  market,"  says  the  Cornell 
Agricultural  Survey,  "makes  about  four  times  as  large 
a  labor  income  as  that  made  by  those  who  are  over  seven 
miles  from  market.  It  appears  that  one  can  pay  5  per 
cent,  on  the  larger  value  per  acre  of  the  land  near  mar- 
ket, and  yet  make  much  more  for  his  labor."  Through 
better  local  marketing  facilities,  farmers'  incomes  can 
be  increased. 

The  further  the  farmer  is  from  the  shipping  point, 
the  greater  the  deterioration  of  his  perishable  goods 
when  they  reach  the  market.  The  greater  the  distance, 
the  less  frequently  the  produce  is  taken  into  the  market. 
An  investigation  in  Kansas  showed  that  farms  from  two 
to  four  miles  from  the  market  carried  their  produce  to 

98 


AGENCIES  FOR  LOCAL  DISTRIBUTION        99 

market  twice  a  week,  while  the  farmers  out  eight  miles 
marketed  it  but  once  in  two  weeks.  There  is,  therefore, 
deterioration  through  holding  for  market  as  well  as  upon 
the  way. 

But  of  greater  importance  is  the  effect  upon  the  char- 
acter of  the  farmer's  output.  Farmers  near  the  shipping 
point  adapt  their  output  to  local  markets.  Their  very 
nearness  to  market  has  the  psychological  effect  of  turn- 
ing their  attention  to  selling  at  home.  The  greater  the 
amount  of  selling  at  home,  the  lower  the  costs  of  food 
distribution.  It  is  just  this  selling  at  home  that  good 
local  marketing  facilities  promote.  This  applies  to  grains 
and  similar  products  as  well  as  to  perishable  goods. 

And,  finally,  a  prime  essential  to  nation-wide  stability 
and  fluidity  in  prices,  and  to  an  equalized  food  supply, 
is  the  lowering  of  initial  marketing  costs.  The  output  of 
certain  sections  can  never  be  available  to  all  parts  of  the 
country  and  can  never  have  its  effect  on  nation-wide 
prices  until  this  initial  cost  is  eliminated. 

It  would  be  difficult  indeed  to  overestimate  the  value 
and  significance  of  less  costly  and  more  mobile  agencies 
for  local  distribution.  Through  selling  at  home,  distri- 
bution costs  can  be  lowered.  The  twentieth  century  has 
brought  us  certain  new  agencies  for  local  distribution 
that  have  extended  the  meaning  of  the  words  "at  home" 
to  include  all  markets  within  a  radius  of  fifty  or  more 
miles  from  the  farm.  Many  growers  can  now  find  an 
adequate  outlet  for  their  produce  within  such  a  radius. 

For  perishable  freight,  Los  Angeles  is  now  but  173 
hours;  Jacksonville,  Florida,  but  89  hours  (1,140  miles), 
and  New  Orleans  but  57  hours  from  Chicago;  Wash- 
ington, D.  C,  is  but  12  hours  from  New  York,  38  hours 
/from  Boston  and  46  hours  from  Montreal.  Fruit  and 
vegetables  grown  in  regions  as  far  away  as  southern 
Florida  can  be  delivered  to  consumers  in  Chicago  and 


ioo  LOWER  LIVING  COSTS  IN  CITIES 

New  York  within  five  days  after  gathering.  It  takes 
about  the  same  time  for  produce  gathered  25  miles  out 
from  Philadelphia  to  reach  Philadelphia  consumers. 
Moreover,  long  haul  shipments  have  better  refrigeration 
facilities.  These  significant  facts  point  to  the  necessity 
for  better  agencies  for  local  distribution  if  the  local 
farmer  is  to  compete  successfully  with  the  farmers  of 
more  distant  sections. 

The  unit  of  quantity  for  steam  shipment  is,  of  course, 
a  carload.  Freight  rates  x  for  carloads  are  lower,  time 
of  transit  shorter,  risk  of  injury  less,  opportunity  for 
securing  better  markets  higher,  probabilities  of  adequate 
returns  vastly  greater.  But  not  all  farmers  can  sell 
direct  in  carload  lots,  and  the  first  problem  is  to  secure 
to  them  the  advantages  of  car  lot  shipments. 

There  are  several  plans  by  which  this  can  be  done. 
Many  steam  roads  now  conduct  local  "pick  up"  services. 
Small  assignments  are  collected  from  a  number  of  sta- 
tions and  brought  to  a  given  point  to  be  combined  into 
carloads.  Some  of  the  railroads  also  run  special  market 
trains  in  order  to  pick  up  relatively  small  quantities. 
For  instance,  a  market  car  destined  for  Philadelphia 
leaves  Columbia  on  Tuesdays  and  Fridays,  stopping  at 
most  of  the  stations  to  pick  up  market  produce,  and  gets 
into  Philadelphia  in  time  for  the  Wednesday  and  Satur- 
day markets.  A  third  plan  is  the  professional  forward- 
ing agent,  who  combines  enough  small  shipments  des- 

1  "The  rate  on  peaches  from  Fayetteville,  Arkansas,  to  Omaha, 
Nebraska,  was  in  November,  1912,  51  cents  per  ioo  pounds,  while 
on  less-than-carload  lots  the  rate  was  99  cents  per  ioo  pounds. 
At  the  same  time  the  carload  rate  on  celery  from  Sanford, 
Florida,  to  Boston,  Massachusetts,  was  41  cents  per  crate  for 
carload  lots  and  51  cents  for  less-than-carload  lots." — F.  An- 
drews, "Carlot  Markets  and  How  They  Are  Supplied,"  Novem- 
ber, 1913,  The  Annals  of  the  American  Academy  of  Political  and 
Social  Science. 

MIDA   UCPQUFV  HAH 


AGENCIES  FOR  LOCAL  DISTRIBUTION       101 

tined  to  a  given  station  to  make  a  carload.  The  agent 
pays  the  railroad  company  at  carload  rates.  When  the 
•car  arrives  at  its  destination  the  separate  consignments 
are  delivered  to  their  respective  consignees.  Such  agents 
have  worked  up  a  good  business  in  Indiana,  Michigan 
and  Tennessee,  handling  small  shipments  almost  as  easily 
as  full  loads.  This  plan  offers  exceptional  possibilities 
for  savings  in  local  shipments  everywhere. 

To  the  railroads  is  due  much  credit  for  the  place  which 
Pittsburgh  occupies  as  third  largest  distributing  center 
for  fruits  and  vegetables  in  the  United  States.  They 
make  a  special  rate  on  country  produce  to  all  dealers  in 
towns  within  105  miles  of  the  city.  The  receipts  of 
country  produce  in  1912,  exclusive  of  eggs  and  dairy 
products,  were  from  35,000  to  40,000  cars  on  the  Penn- 
sylvania lines  alone.  « 

The  railroads  have  keenly  recognized  their  dependence 
upon  prosperous  agricultural  conditions  for  increased 
business  and  the  profits  resulting  therefrom.  Thus  they 
have  made  organized  efforts  to  bring  more  farmers  to 
certain  regions  and  to  promote  scientific  agriculture 
through  instruction  trains.  They  also  look  to  the  supply 
of  farm  labor  in  certain  sections  and  send  experts  to 
give  advice  as  to  marketing. 

There  are  at  hand,  however,  certain  newer  agencies 
for  distributing  farm  produce  that  are  mobile,  cheap  and 
effective  for  local  distribution.  These  include  trolley 
freight,  water  transportation,  good  roads,  parcels  post 
and  motor  trucks.  These  agencies  tend  to  lower  the  cost 
of  haul  to  the  station.  More  significant  still,  they  make 
it  possible  to  ship  in  less-than-carload  lots  and,  therefore, 
to  handle  the  surplus  of  the  average  small  farmer.  And 
finally  they  make  it  possible  to  deliver  goods  immediately 
to  the  market  or  section  of  the  city  where  needed. 

To  all  interested  in  our  local  and  interstate  transporta- 


102  LOWER  LIVING  COSTS  IN  CITIES 

tion  systems,  it  is  becoming  increasingly  apparent  that 
trolley  freight  is  to  play  an  ever-larger  part  in  develop- 
ing local  agricultural  communities  and  in  distributing 
farm  produce  to  needy  urban  sections. 

The  features  of  trolley  freight1  that  make  its  possi- 
bilities loom  up  so  large  are : 

1.  Frequent  stops  at  small  outlay,  thus  reducing  the 
cost  of  farmer's  haul  to  station. 

2.  Regions  inadequately  served  by  other  carriers  can 
be   tapped,   thus   placing  many   farmers   several   hours 
nearer  the  city's  markets. 

3.  The  ability  to  ship  in  smaller  quantities  than  do 
the  -railroads    (which   are   essentially   carload    lot    and 
wholesale  distributors),  thus  giving  a  new  avenue  for 
marketing  the  surplus  of  small   farmers  and   focusing 
attention  upon  the  nature  of  the  output  of  all  farmers. 

4.  Farmers  can  market  their  goods  in  a  fresher  con- 
dition, thus  giving  the  consumer  better  goods  and  the 
farmer  better  prices. 

5.  Sections  of  the  city  not  reached  by  railroad  termi- 
nals can  be  reached  by  trolley  freight,  thus  making  pos- 
sible the  distribution  of  food  products  to  the  needier 
sections  of  the  large  city  and  directly  to  the  market 
center  in  the  small  city. 

6.  It  increases  the  facilities  for  getting  the  output  of 
manufacturing  establishments  to  railroad  stations,  and 
from  the  city  to  outlying  suburbs  and  farmers,  thereby 
enhancing  both  urban  and  farm  values. 

7.  It  pays. 

The  use  to  which  trolley  lines  are  put  as  freight  car- 
riers may  be  classified  as :  ( I )  carrying  farm  produce 
to  market,  and  miscellaneous  manufactures  and  mer- 

1  For  a  more  complete  discussion  of  the  use  and  possibilities 
of  Trolley  Freight,  see  an  article  by  the  author  in  The  Aera 
of  June,  1913. 


AGENCIES  FOR  LOCAL  DISTRIBUTION       103 

chandise  to  the  country;  (2)  carrying  carload  lots  as 
feeders  of  the  steam  railroads;  (3)  delivering  parcels 
and  lighter  packages  into  and  out  of  the  large  cities; 
(4)  acting  as  a  means  of  urban  distribution. 

The  farm  produce  carried  to  market  includes  milk, 
butter,  eggs,  fruit,  poultry,  livestock  and  other  farm 
products.1 

xThe  use  of  trolleys  in  getting  farm  produce  to  markets  has 
been  developed  more  generally  in  the  Middle  and  Far  West  than 
it  has  as  yet  in  the  eastern  states,  despite  the  fact  that  the  east- 
ern states  have  greater  mileage  in  interurban  trolley  lines.  Ex- 
amples of  its  use  are  found  in  the  practices  of  certain  middle 
western  trolley  companies  and  in  the  freight  and  express  service 
in  Boston. 

Centering  in  Indianapolis,  in  the  largest  traction  terminal  in 
the  world,  are  eleven  electric  lines  radiating  2,000  miles  of 
trackage  from  the  extreme  northern  to  the  extreme  southern 
part  of  the  state,  bringing  in  upward  of  15,000  tons  of  freight  per 
month.  The  major  portion  of  this  freight  consists  of  foodstuffs. 
The  city  secures  over  75  per  cent,  of  its  market  supplies  over 
these  lines.  A  long  distance  telephone  message  at  five  in  the 
morning  brings  fruit  and  vegetables  from  a  radius  of  fifty  miles. 
The  result  is  a  splendidly  developed  agricultural  section,  a  better 
development  in  the  manufacturing  and  commercial  possibili- 
ties of  Indianapolis  and  a  lower  food  cost  to  the  Indianapolis 
consumer.  South  Bend  and  Fort  Wayne,  Indiana;  St.  Louis, 
Missouri;  cities  in  southern  Illinois;  Chicago;  Columbus,  Day- 
ton, Toledo,  Cincinnati  and  Cleveland  in  Ohio,  are  other  cities 
already  profiting  by  such  traffic.  In  many  of  these  cities  are 
open  municipal  markets  with  the  trolley  lines  running  directly 
to  them  so  that  farmers  may  receive  retail  prices  for  their  goods. 

The  second  class  of  freight  handled  by  trolley  lines  is  the 
hauling  of  heavy  freight  by  the  carload  as  feeders  of  the 
steam  railroads  and  as  a  means  of  getting  produce  in  carload 
lots  direct  to  the  retailer.  On  the  lines  of  the  Illinois  Traction 
system  there  are  seven  coal  companies  depending  wholly  upon 
that  system  for  an  outlet.  These  lines  during  the  winter  months 
carry  an  average  of  1,000  cars  of  coal  monthly.  Manufacturing 
plants  along  the  line  of  the  Bay  State  Street  Railway  Company 
have  asked  for  the  construction  of  sidings  so  as  to  do  away 


104  LOWER  LIVING  COSTS  IN  CITIES 

Within  and  centering  in  cities  of  the  United  States 
are  40,088  miles  of  electric  track,  practically  double  that 
of  a  decade  ago,  operated  by  1,279  companies  owning 
89,601  cars  with  an  authorized  stock  and  bond  issue  of 
nearly  five  billion  dollars  ($4,708,568,141),  and  with 
over  two  billions  ($2,384,344,513)  in  outstanding  stock. 
These  tremendous  resources  can  be  turned  with  profit 
to  local  distribution.  Several  lines  are  now  making 
from  12  to  25  per  cent,  of  their  gross  receipts  from 
their  freight  and  express  business.  The  gross  earnings 
on  all  lines  from  such  business  increased  from  $1,439,000 
in  1902  to  $6,792,000  in  1907,  an  increase  of  372  per 
cent.  The  revenues  from  trolley  freight  within  New 
York  City  increased  from  $4,032  in  1908  to  $278,354,000 
in  1910.  The  amount  of  milk  received  by  trolley  in 

with  long  and  expensive  hauls  to  steam  road  stations.  An  ex- 
ample of  the  use  to  which  trolley  freight  has  been  put  in  the 
delivering  of  parcels  and  lighter  packages  into  and  out  of  the 
large  cities  is  found  in  the  class  of  service  offered  by  the  Ohio 
Electric  Company.  The  merchants'  freight  service  of  this  com- 
pany is  handled  on  passenger  cars,  equipped  with  baggage  com- 
partments. The  rates  are  little  higher  than  those  for  freight 
handled  on  the  regular  trolley  freight  car.  The  commodities 
offered  for  transportation  in  this  way  consist  largely  of  ice 
cream,  fruits,  bread  and  merchandise.  The  trolley  lines  cen- 
tering in  Philadelphia  also  do  a  business  of  this  character. 
The  handling  of  freight  within  the  city  on  traction  lines  is 
still  in  its  infancy,  as  the  trolley  lines  in  some  of  our  larger 
cities  have  heretofore  been  prohibited  from  doing  a  freight 
business,  while  in  others  the  companies  themselves  have  not 
paid  special  attention  to  the  development  of  such  traffic.  The 
business  of  the  Bay  State  Street  Railway  Company  increased 
165  per  cent,  for  the  month  of  November,  1912,  over  that  of 
November,  1911,  an  increase  to  be  explained  almost  entirely 
by  the  fact  that  the  terminal  facilities  within  the  city  were 
very  greatly  developed  and  the  company  was  no  longer  obliged 
to  make  a  transfer  of  goods  from  car  to  car  or  from  car  to 
automobile  truck. 


AGENCIES  FOR  LOCAL  DISTRIBUTION       105 

Philadelphia  increased  from  3,800,000  quarts  in  1905 
to  9,170,000  quarts  in  1913.  There  is  a  similar  increase 
in  English  tramways.  This  is  indicative  of  the  possi- 
bilities of  moving  freight  by  less  than  carload  lots  on 
trolley  aid  tramway  lines. 

The  development  of  trolley  freight  as  a  means  of  re- 
tail distribution  would,  first  of  all,  add  to  the  receipts 
of  trolley  companies.  Where  given  a  fair  trial,  under 
competent  management,  trolley  freight  has  proved  profi- 
table. There  is  already  a  surplus  current  for  the  heavy 
passenger  traffic  of  the  day  which  can  profitably  be 
turned  to  freight  business  during  other  hours. 

The  development  of  trolley  freight,  moreover,  would 
place  the  farmer  many  hours  nearer  the  city  with  a 
consequent  readjustment  in  the  character  of  his  output 
to  local  markets.  The  farmer  in  his  efforts  to  increase 
his  profits,  the  consumer,  in  his  desire  to  get  better  food 
at  lower  prices,  the  manufacturer,  in  his  efforts  to  get 
an  outlet  for  his  products,  and  the  city  that  would  be 
located  in  a  wholesome  agricultural  environment,  must 
all  look  toward  an  increased  use  of  direct  marketing  and 
of  selling  at  home.  Trolley  freight  makes  for  just  this 
kind  of  development. 

The  development  of  such  transportation  facilities  will 
save  time  to  farmers.  For  instance,  an  outlying  farmer 
fifteen  or  twenty  miles  from  Philadelphia  will  take  a  day 
to  drive  to  the  Philadelphia  market,  a  day  to  sell  his 
products,  and  a  day  to  get  home.  Thus  half  his  week 
is  gone.  With  trolley  freight  he  could  load  his  goods  on 
a  trolley  car  at  six  in  the  evening,  take  an  early  train  to 
the  city  the  next  morning,  sell  to  the  middlemen  or  direct 
to  the  consumers  en  route  or  at  the  market,  and  be  back 
in  the  early  afternoon,  using  but  half  a  day  instead  of 
three,  and  keeping  his  invested  capital  at  home  at  pro- 
ductive work.  The  output  of  the  farm  would  conse- 


106  LOWER  LIVING  COSTS  IN  CITIES 

\ 

quently  be  increased,  and  the  farmer's  purchasing  power 
enlarged. 

The  development  of  trolley  freight  in  many  sections 
would  mean  that  the  gates  of  every  farm  would  not  only 
swing  outward  to  send  an  increasing  volume  of  products 
to  the  city  consumer,  but  they  would  also  swing  inward 
to  allow  the  entrance  of  goods  made  or  sold  in  the 
near-by  city.  The  result  would  be  a  closer  interweaving 
of  the  agricultural,  economic  and  social  interests  of  coun- 
try and  city  to  the  end  that  confidence  would  supplant 
distrust,  and  cooperation,  indifference;  thus  both  the 
city's  position  as  an  urban  center  and  the  value  of  the 
outlying  farms  would  be  enhanced. 

More  direct  access  to  markets  can  also  be  secured 
through  the  development  of  water  transportation,  espe- 
cially by  the  gasoline  barge  and  truck  boat.  One  crate 
of  produce  can  be  carried  on  a  boat  as  quickly  and  effi- 
ciently as  a  carload.  The  freight  rate  by  boat  is  often 
not  much  higher  for  a  small  than  for  a  large  consign- 
ment. Adequate  development  of  the  Mississippi  valley 
waterway  and  the  Atlantic  intercoastal  waterways  should 
mean  lower  transportation  costs.  With  the  small  truck 
boat  and  gasoline  barge  we  may  yet  find  that  our 
old  canals  and  waterways,  once  so  highly  prized,  may 
have  their  value  largely  returned.  The  development  of 
our  city  wharves,  with  the  power  in  our  cities  to  own 
and  operate  wharves  and  market  piers,  will  all  aid  in 
getting  water-front  farmers  nearer  by  many  hours  to 
the  markets  of  the  urban  centers. 

Of  distinct  significance  in  reducing  hours  to  market 
by  heavier  loads  and  ease  of  shipment  is  the  develop- 
ment of  good  inter-county  roads.  Good  roads  centering 
in  good  urban  markets  have  instantly  reflected  their  ad- 
vantages in  higher  farm  values.  The  "good  roads"  move- 
ment is  of  importance  to  every  farmer.  With  no  thought 


AGENCIES  FOR  LOCAL  DISTRIBUTION       107 

of  deprecating  the  building  of  good  state  roads,  yet  it 
is  clear  that  relatively  few  farms  can  ever  be  on  state 
roads.  What  is  needed  are  good  dirt  roads  with  easy 
grades,  connecting  all  local  farms  with  their  nearest  mar- 
ket;' not  good  automobile  roads  connecting  cities  with 
cities. 

Related  to  the  opportunities  afforded  by  road  develop- 
ment are  the  possibilities  of  sending  farmers'  produce 
into  the  city  by  parcels  post.  In  Germany  the  extensive 
use  of  the  parcels  post  has  proved  a  poignant  means  of 
lowering  living  costs.  The  consul-general  of  the  United 
States  at  Hamburg  says:  "The  parcels  post  makes  it 
possible  for  the  farmer  to  visit  the  city  once  a  year, 
where  he  solicits  customers  whom  he  supplies  directly 
from  the  farm  just  as  regularly  as  from  the  retail  shop 
of  the  immediate  neighborhood."  The  American  consul 
at  Cork  states  that  "people  throughout  the  rural  districts 
generally  avail  themselves  of  this  express  system  to  get 
their  produce,  such  as  that  of  farm  and  market  garden, 
to  market.  Dealers  in  fruit,  game,  fish,  eggs,  butter,  meat 
and  such  commodities  generally  use  this  means  of  speed- 
ily reaching  their  customers  or  the  market."  The  haus- 
frau  in  Germany  receives  her  fresh  vegetables,  her  poul- 
try, and  fruit  along  with  her  mail  in  the  early  morning 
delivery.  They  come  fresh  to  her  table  from  possibly 
one  hundred  miles  away  in  a  country  village.  A  postal 
card  changes  the  standing  order.  All  Germany  offers 
itself  as  a  market  for  the  German  farmer.  Producer 
and  consumer  are  practically  as  close  together  as  though 
they  were  elbowing  at  the  city's  markets. 

The  motor  truck  is  another  promising  agency  for 
minimizing  local  distribution  costs.  Figures  compiled 
by  the  Power  Wagon  show  that  there  were  in  the 
United  States  at  the  beginning  of  1913  in  the  express, 
transfer  and  haulage  business  over  6,500  power  wagons, 


io8  LOWER  LIVING  COSTS  IN  CITIES 

valued  at  $6,000,000.  This  shows  an  increase  over  the 
previous  year  of  200  per  cent.  Farm  produce  when 
shipped  over  steam  railroads  must  be  handled  a  number 
of  times.  It  must  be  loaded  on  wagons  at  the  farm, 
placed  on  the  station  platform,  loaded  on  the  cars,  un- 
loaded on  a  platform,  then  placed  upon  a  vehicle,  taken 
to  the  wholesale  market,  where  it  is  again  unloaded,  only 
to  be  loaded  a  few  hours  later  on  the  carts  and  wagons 
of  the  retailer,  to  be  taken  to  his  store,  then  to  be  loaded 
on  delivery  wagons,  to  be  taken  to  the  consumer.  With 
the  use  of  motor  trucks  the  produce  could  be  loaded  at 
the  farmer's  gate,  then  taken  immediately  to  the  section 
of  the  city  where  needed. 

Moreover  motor-truck  service  taps  regions  now  isolated 
by  reason  of  distance  from  market.  Ten  to  fifteen  miles 
is  as  much  as  farmers  can  profitably  drive  to  market 
their  produce.  The  motor  truck  with  equal  ease  can  tap 
regions  forty,  fifty,  or  even  one  hundred  miles  away.1 
Not  since  the  advent  of  the  railroad  has  a  more  significant 
distributing  agency  been  introduced. 

The  savings  of  the  motor  truck  within  the  city  limits 
are  even  greater.  Thomas  Edison  is  reported  as  stating 
the  case  in  this  way :  "Fifty  per  cent,  of  all  the  freight 
in  the  world  is  moved  to  and  from  railroad  stations  by 
the  horse-drawn  vehicle.  The  automobile  truck  of  half 

1The  approximate  cost  for  operating  a  five-ton  truck  runs 
around  17  cents  per  mile,  or  about  $12  for  50  miles,  $10  for 
40  miles,  $8.50  for  30  miles  and  $7  for  20  miles.  A  large  Brook- 
lyn, N.  Y.,  department  store  displaced  33  horses  with  n  trucks, 
at  a  6  months'  saving  of  $1,360  in  favor  of  the  machines.  The 
four  leading  American  express  companies  have  already  invested 
$1,500,000  in  motor  trucks  to  facilitate  the  prompt  and  economi- 
cal handling  of  packages.  The  Starkey  Produce  Company  of 
Philadelphia  supplanted  5  wagons  with  i  truck  and  reduced 
time  of  a  round  trip  from  9  to  3  hours.  Through  this  means 
they  could  market  perishable  produce  the  day  it  was  gathered. 


AGENCIES  FOR  LOCAL  DISTRIBUTION       109 

the  length  takes  double  the  freight  and  goes  twice  as 
fast." 

Closely  related  to  the  possibilities  of  the  motor  truck 
is  the  location  of  freight  terminal  facilities  so  as  to 
eliminate  unnecessary  trucking.  Two  thousand  trucks  in 
the  city  of  New  York  have  to  earn  about  seven  dollars 
a  day  before  they  make  money  for  their  proprietors. 
The  average  loss  of  time  at  terminals,  because  of  con- 
gestion, is  from  three  to  four  hours.  When  cities  place 
terminals  so  as  to  eliminate  unnecessary  cartage  and 
hauling,  large  saving  can  be  made.  In  Philadelphia  5,000 
vehicles  are  used  in  carting  and  hauling  freight.  At  $5 
per  day  for  300  days  per  year,  this  means  an  annual 
charge  of  $7,500,000.  A  proper  city  plan  could  ma- 
terially lower  these  costs. 

Transportation  systems  alone  do  not  grow  farm  pro- 
duce. Neither  are  foodstuffs  grown  until  there  is  at 
hand  the  means  for  transporting  them  to  market.  Pro- 
duction and  transportation  mutually  react  to  the  advan- 
tage of  both.  Each  must  wait  upon  the  other.  Our 
transportation  history  is  replete  with  illustrations  to  show 
the  transforming  effect  that  new  and  better  transporta- 
tion agencies  have  on  the  character  and  output  of  the 
farm  and  on  the  supply  available  to  the  urban  dweller. 
The  great  need  in  the  improvement  of  our  existing  trans- 
portation system  is  to  focus  attention  more  and  more  on 
increasing  and  perfecting  agencies  for  efficient,  economic 
local  distribution. 


CHAPTER   X 

MUNICIPAL   MARKETS   AND   OTHER   MEANS   OF 
DIRECT   MARKETING 

The  twentieth  century  city  has  two  very  definite  food 
problems.  One  is  to  keep  its  gates  open  to  the  food  sup- 
ply of  the  nation  and  the  world ;  the  other  is  to  open  wide 
its  gates  to  the  output  of  the  agricultural  country  round 
about.  One  unfortunate  result  of  making  available  to 
each  city  the  food  supply  of  all  sections  of  the  nation, 
and  indeed  of  the  world,  has  been  to  cause  the  urban 
dweller  to  give  all  too  little  heed  to  the  output  and  pros- 
perity of  the  surrounding  farming  community.  The 
twentieth  century  need  is  to  encourage  near-by  farmers 
to  sell  at  home. 

THE  OPPORTUNITY  FOR  SELLING  AT  HOME 

No  section  of  the  United  States  is  now  wholly  rural. 
In  all  parts  of  the  nation  the  city  is  growing  apace.  In 
no  state  in  the  union  from  1900  to  1910  did  the  urban 
population  increase  less  than  10  per  cent.,  while  in  16 
states  it  increased  from  10  to  30  per  cent.,  in  13  states 
from  30  to  50  per  cent.,  and  in  19  states  over  50  per 
cent.  In  6  states  the  rural  population  actually  declined ; 
in  6  states  the  urban  population  more  than  doubled.  This 
growth  of  cities  in  all  parts  of  our  country  means  ever- 
widening  possibilities  for  local  marketing  and  for  selling 
at  home.  As  the  season's  output  runs  from  south  to 
north,  each  city,  through  national  agencies,  can  now  avail 

no 


MUNICIPAL  MARKETS  m 

itself  of  every  possible  variety  of  foodstuffs.  But  by 
proper  civic  action  and  cooperative  encouragement  each 
city  can  now  buy  an  ever-increasing  proportion  of  its 
own  season's  output  at  home.  This  buying  and  selling 
at  home  will  mean  a  larger  output  from  the  surrounding 
farms;  will  mean  the  adaptation  of  that  output  to  local 
markets ;  will  mean  stimulated  land  values  and  a  more 
prosperous  local  community  round  about;  will  mean  a 
richer  purchasing  clientele  for  the  city's  factories  and 
stores ;  will  mean  goodly  savings  in  food  distribution, 
and  hence  lower  food  costs  to  city  dwellers. 

The  farmer's  income  increases  with  his  marketing  fa- 
cilities. The  Cornell  Agricultural  Survey  of  March, 
1911,  found  that  the  average  annual  income  from  labor 
by  615  farmers,  operating  their  own  farms,  each  with 
an  average  capital  of  $5,527,  was  but  $423 ;  and  that  the 
average  annual  labor  income  of  154  tenants  was  but 
$379.  Other  sources  also  indicate  that  the  average 
farmer  does  not  make  over  $700  per  year,  or  less  than 
two  dollars  per  day.  He  does  not  make  more  now  than 
does  the  average  city  wage-earner.  This  largely  accounts 
for  the  exodus  from  the  farm.  It  also  points  to  the  need, 
lest  we  become  a  nation  of  peasant  farmers,  for  an  in- 
crease in  the  farmer's  actual  income. 

Increased  facilities  for  selling  at  home  will  stimulate 
output.  If  we  are  to  remain  an  exporting  nation,  our 
farmers  must  increase  their  yields  and  all  land  available 
to  agriculture  must  be  put  to  use.  Due  to  the  increase  in 
urban  population,  without  a  corresponding  stimulus  to 
food  producing,  the  amount  of  our  exports  is  rapidly 
falling  off.  In  1904  the  cattle  exported  were  valued  at 
$41,000,000;  in  1911  their  value  was  $14,000,000.  From 
1901  to  1911  the  pounds  of  fresh  beef  exported  fell  from 
354,000,000  to  9,000,000.  Though  a  young  nation,  we 
are  already  on  the  verge  of  becoming  dependent  on  the 


112  LOWER  LIVING  COSTS  IN  CITIES 

outside  world  for  an  increasing  portion  of  our  food 
supply. 

Selling  at  home  will  not  only  stimulate  output  but  it 
will  also  have  a  psychological  tendency  to  make  the 
farmer  adapt  his  output  to  local  conditions.  To  derive 
the  greatest  possible  profit  from  his  products,  the  farmer 
must  pay  attention  to  the  condition  of  his  goods,  to  their 
appearance,  and  to  economy  and  promptness  in  market- 
ing them.  While  the  output  of  any  given  farm  will  have 
to  be  adapted  to  soil  and  climate,  to  the  abundance  or 
scarcity  of  labor,  to  the  size  of  the  farm  and  to  the  tariff, 
yet,  other  things  being  equal,  of  greatest  influence  is  the 
opportunity  for  marketing.  Through  proper  marketing 
facilities,  Munich,  a  city  with  a  population  of  half  a 
million,  now  gets  one-fourth  of  its  meats  by  road  from 
neighboring  farms. 

To  be  sure,  there  has  been  much  adaptation  of  local 
products  to  local  markets.  A  map  showing  by  shading 
the  density  of  milk  production  and  a  map  showing  in  a 
similar  manner  the  density  of  urban  population  will 
reveal  that  the  heavily  shaded  sections  are  almost  identi- 
cal. In  orchard  products,  Pennsylvania's  output  in- 
creased more  rapidly  from  1890  to  1900  than  did  the 
average  output  throughout  the  United  States. 

But  there  is  room  for  a  greater  adaptation.  The  num- 
ber of  chickens  raised  in  Pennsylvania  increased  from 
six  and  one-half  million  in  1880  to  ten  and  one-half  mil- 
lion in  1900;  but  during  this  period  the  number  raised 
in  all  the  states  increased  from  102  million  to  234  mil- 
lion. In  egg  production  Pennsylvania  doubled  her  out- 
put during  these  two  decades,  while  the  output  of  the 
United  States  as  a  whole  more  than  trebled.  That  there 
are  still  great  possibilities  in  adaptation  of  local  output 
to  the  local  markets  is  also  revealed  in  the  fact  that  Pitts- 
burgh gets  at  least  $20,000,000  of  its  total  annual  con- 


MUNICIPAL  MARKETS  113 

sumption  of  $25,000,000  in  fruits  and  vegetables  from 
distant  points;  the  garden  crops  produced  on  the  sur- 
rounding farms  certainly  do  not  exceed  $3,000,000  in 
value.  Yet  with  proper  emphasis  and  encouragement, 
truck  gardening  around  Pittsburgh  can  unquestionably 
be  made  to  pay.  In  order  to  further  local  truck  garden- 
ing, one  public-spirited  citizen  of  Pittsburgh  purchased 
some  few  hundred  acres  of  land  and  divided  it  into  five- 
and  six-acre  tracks  for  gardening  and  poultry  raising 
purposes.  It  is  believed  that  three  five-acre  farms,  con- 
venient to  such  an  excellent  market,  will  return  a  profit 
of  from  $1,500  to  $2,000  a  year.1 

Cities  cannot  live  solely  by  the  exchange  of  goods 
among  themselves.  They  must  also  exchange  their  prod- 
ucts for  the  farmers'  goods.  The  city's  prosperity  is  in 
direct  ratio  to  the  cost  of  distributing  its  output.  For 
the  manufacturer  as  well  as  the  farmer,  selling  at  home 
means  lower  distribution  costs.  The  greater  the  freight 
and  transportation  costs,  the  lower  the  returns  for  the 
urban  store.  Urban  prosperity  is  enhanced  by  selling 
to  and  buying  from  the  country  round  about. 

In  the  more  direct  routing  of  food  products  lie  golden 
prospects  for  lower  living  costs.  Municipal  markets  and 
other  means  of  direct  marketing  will  further  this  direct 
routing.  Local  output  will  then  have  its  effect  on  city 
prices. 

Direct  marketing  can  be  extended  through  the  develop- 
ment of  the  agencies  of  local  distribution,  discussed  fully 
in  Chapter  IX,  and  in  cooperation  as  discussed  in  Chap- 
ters XI  and  XII.  The  means  for  its  encouragement  as 
discussed  in  this  chapter  are  three :  municipal  markets, 
slaughter-houses  and  direct  sales  by  hampers  or  other 
methods. 

1  See  J.  T.  Holdsworth :  Report  of  the  Economic  Survey  of 
Pittsburgh,  1912. 


H4  LOWER  LIVING  COSTS  IN  CITIES 


MUNICIPAL  MARKETS 

Municipal  markets  are  not  new.  They  were  formerly 
found  in  every  village  and  city.  It  was  only  in  the  latter 
half  of  the  nineteenth  century  that  the  cities,  absorbed  in 
the  development  of  their  own  industries,  began  to  be 
neglectful  of  markets  and  market  places.  To  be  sure, 
fairly  good  markets  still  exist  in  many  cities  throughout 
the  United  States.  Boston,  Baltimore,  New  Orleans, 
Rochester,  Indianapolis,  Dubuque,  Pittsburgh,  Buffalo, 
Richmond  and  Norfolk  all  claim  fairly  good  markets. 
Out  of  158  cities  reporting  to  the  Census  Bureau  for  the 
Statistics  of  Cities  for  1906,  104  (including  28  that  spent 
less  than  $1,000,  and,  therefore,  must  have  had  no  mar- 
ket policy  of  any  importance)  reported  no  expenditures 
for  either  markets  or  public  scales ;  42  reported  expendi- 
tures of  from  $1,000  to  $10,000,  and  only  12  of  the  158 
reported  annual  expenditures  of  $10,000  or  over.  Out  of 
184  cities  reporting  for  the  Statistics  of  Cities  for  1910, 
88  reported  no  expenditures  for  markets  and  public 
scales;  35  reported  an  expenditure  of  less  than  $1,000; 
47  an  expenditure  of  from  $1,000  to  $10,000,  and  but  14 
an  expenditure  of  over  $10,000.  In  other  words,  not 
over  one  city  in  a  dozen  throughout  the  United  States 
has  now  anything  like  an  effective  market  policy.  Our 
cities  are  spending  two  dollars  on  cemeteries  and  crema- 
tories to  one  on  markets :  more,  that  is,  on  resting  places 
for  the  dead  than  on  food-buying  facilities  for  the  living. 

Municipal  markets  do  not  develop  themselves.  The 
American  attitude  has  been  to  set  aside  a  building  or  a 
plot  of  land  for  a  market  and  then  expect  the  market 
to  be  a  success.  The  making  of  a  successful  municipal 
market  with  maximum  results  necessitates  virile  ener- 
getic thought  and  supervision.  In  the  first  place,  there 


MUNICIPAL  MARKETS  115 

must  be  a  terminal  wholesale  market  in  cities  of  any  size 
where  foodstuffs  from  both  near-by  and  distant  regions 
may  be  offered  for  sale  as  directly  and  as  reliably  as  pos- 
sible. A  second  essential  is  the  adaptation  of  the  kind 
and  location  of  markets  to  modern  customs,  to  move- 
ments in  population  and  to  transportation  facilities.  The 
third  essential  to  a  successful  market  policy  is  the  en- 
couragement of  farmers'  markets  as  distinct  from  merely 
groups  of  professional  retailers,  so  that  producer  and 
consumer  may  be  brought  more  directly  together. 
Fourthly,  charges  for  stall  rents  must  be  fixed  at  a  point 
that  will  bring  a  reasonable  return  on  the  investment  or 
present  value,  but  not  at  a  point  that  will  return  unduly 
large  profits  to  the  city.  A  fifth  prerequisite  to  success 
is  to  give  to  stall  renters  every  reasonable  facility  in 
buying,  conserving  and  selling  their  produce.  Again 
the  markets  must  be  so  regulated  and  supervised  as  to 
cleanliness,  purity  of  food,  and  honesty  in  weights  and 
measures,  that  they  will  be  preferred  by  consumers  as  a 
buying  place  above  other  places  not  so  regulated  and 
supervised.  And,  finally,  there  must  be  thorough  and 
systematic  supervision  and  administration  of  the  city's 
market  policy,  including  reports  on  retail  and  wholesale 
prices,  so  that  the  public  markets  may  be  a  real  competi- 
tive factor  both  in  attracting  trade  and  in  fixing  con- 
sumer's prices. 

THE  TERMINAL  MARKET 

The  wholesale  terminal  market  is  needed  to  give  a 
reliable  clearing  place  at  minimum  costs  for  food  pro- 
duce, coming  alike  from  neighboring  farms  and  from 
producers  in  distant  regions,  thus  securing  to  the  city 
both  the  season's  output  of  other  climes  and  the  greatest 
possible  amount  of  selling  and  buying  at  home.  Cyrus 


ii6  LOWER  LIVING  COSTS  IN  CITIES 

C.  Miller  of  New  York  City,  formerly  president  of  the 
Borough  of  the  Bronx,  has  done  more  than  any  other 
person  in  the  United  States  to  point  out  the  need  for 
and  advantages  of  terminal  wholesale  markets. 

But  few  municipal  wholesale  terminal  markets  are 
found  in  America,  and  such  as  do  exist  are  not  always 
administered  in  a  way  conducive  to  the  best  results. 
Well  administered  terminal  wholesale  markets  are  char- 
acteristic of  every  European  city.  Typical  markets  of 
this  character  are  found  in  Budapest,  Prague,  Havre, 
Lyons,  Brussels,  London,  Paris.  The  establishment  in 
Paris,  for  instance,  located  near  the  Louvre,  and  known 
as  the  Holies  Centrales,  consists  of  ten  pavilions  and 
open  structures,  partly  covered  by  a  roof,  occupying  in 
its  entirety  twenty-two  acres  and  erected  at  a  total  cost 
of  $22,000,000.  In  this  vast  entrepot  the  various  market 
supplies  are  received  by  rail,  by  drays,  by  boats  on  the 
Seine  River  and  by  great  wagons  from  the  country ;  over 
one  billion  pounds  of  products  are  sold  there  every  year. 

The  great  need  of  American  cities  is  to  have  properly 
located,  adequately  equipped  and  well  administered  public 
terminal  wholesale  markets.  The  prime  essential  for 
such  a  market  is  location  at  a  point  where  the  tracks  of 
all  the  railroads  entering  the  city  can  terminate.  If 
possible,  it  should  also  be  located  near  the  water  front 
with  adequate  wharfage  facilities  for  all  truck  boats;  if 
this  is  not  possible,  then  there  should  be  a  second  such 
market  on  the  water  front. 

In  order  to  fulfill  its  missions  as  a  reliable  terminal  for 
produce  sent  into  the  city,  a  requisite  essential  to  success 
is  sale  at  auction  by  bonded  city  officials  forbidden  to 
be  interested  directly  or  indirectly  in  the  trade  of  market 
wares  of  any  kind.  The  commission  to  be  charged  by 
these  licensed  auctioneers  must  be  definitely  fixed.  In 
Europe  the  commission  ranges  around  2  per  cent,  of  the 


MUNICIPAL  MARKETS  117 

total  annual  auction  sales.  This  in  itself  is  a  much  lower 
cost  for  selling  than  the  usual  commission  charged  in 
this  country.  This  saving,  however,  is  a  very  insignifi- 
cant part  of  the  total  savings  to  be  made  by  adopting 
the  auction  system.  Great  savings  will  be  brought  about 
through  the  elimination  of  all  commission  abuses,  as 
depicted  in  Chapter  VI.  Of  still  greater  significance, 
the  producer  will  be  tempted  to  ship  to  the  city  with  such 
a  department,  knowing  full  well  that  he  will  get  maxi- 
mum returns  for  his  goods.  The  producer  then  has 
three  choices :  either  alone  or  in  cooperation  with  others, 
he  can  rent  stands  in  one  of  the  retail  markets ;  he  can 
ship  directly  to  some  wholesaler;  or  he  can  sell  at  this 
public  auction.  The  experience  of  European  cities  is 
that  he  prefers  the  third. 

Just  such  results  from  auction  departments  in  terminal 
wholesale  markets  are  emphasized  in  the  recent  special 
consular  report  on  European  Markets.1  Consul  John  C. 
Covert  says  as  to  this  system  in  Lyons :  "Fish  and  game 
are  brought  here  for  sale  from  England,  Germany,  the 
Netherlands,  Russia  and  from  all  parts  of  France.  If 
a  grocer  or  butcher  anywhere  in  France,  in  fact  any- 
where in  Europe  outside  of  Lyons,  has  an  overstock  of 
any  kind  of  provisions,  he  is  always  sure  that  he  can  get 
rid  of  it  at  the  central  market  auction  in  Lyons.  Often 
a  stock  of  provisions  is  sold  here  at  private  sale  by  cor- 
respondence for  and  to  parties  outside  the  city."  Consu- 
lar Assistant  Frank  Bohr  writes  as  to  results  obtained  in 
Berlin :  "The  municipal  sales  commissioners  are  bonded 
officials  who  are  forbidden  to  be  interested,  directly  or 
indirectly,  in  the  trade  in  market  wares  of  any  kind. 
They  are  responsible  to  the  market  hall  management,  and 
are  allowed  to  collect  a  certain  fixed  percentage  of  all 
sales  made.  The  primary  purpose  of  these  officers  is  to 

1  See   Special   Consular   Reports,  Vol.  XLII. 


ii8  LOWER  LIVING  COSTS  IN  CITIES 

offer  distant  dealers  and  producers  opportunity  to  ship 
in  their  wares,  and  have  them  brought  into  the  hands  of 
Berlin  dealers  and  consumers,  through  the  agency  of  re- 
sponsible middlemen  and  with  the  assurance  of  a  pub- 
lished and  steady  price.  A  second  or  indirect  purpose 
is  that,  through  their  competition  with  the  private  whole- 
sale dealers  and  through  the  daily  publication  of  their 
report  on  the  average  wholesale  prices  for  all  wares  and 
at  all  the  halls,  the  municipal  sales  commissioners  exer- 
cise a  steadying  influence  upon  the  entire  wholesale  busi- 
ness. Although  it  is  estimated  that  they  handle  only 
about  one-fifth  of  the  total  wares  received  at  the  central 
market  hall,  it  is  nevertheless  conceded  that  they  indi- 
rectly prevent  extortion  by  the  private  wholesale  dealer 
upon  the  producer  or  dealer  on  the  one  hand  and  upon 
the  consumer  or  retailer  on  the  other." 

There  can  be  little  doubt  that  the  auction  department 
of  the  municipal  wholesale  terminal  market  is  of  great 
value  in  getting  reliable  and  stable  sales  for  goods  sent 
in  alike  from  the  neighboring  regions  and  from  the  most 
distant  countries.  To  prevent  abuse,  it  would  be  neces- 
sary to  enforce  strictly  the  regulation  that  all  goods  sold 
at  the  auction  department  must  come  from  without  the 
city. 

Not  only  can  trade  be  attracted  from  without  by  bona 
fide  municipal  auction  sales  at  a  terminal  market  and  by 
similar  means  of  giving  confidence  and  publicity  to  such 
a  market  center,  but  facilities  can  also  be  offered  of  a 
character  that  will  attract  to  such  centers  buyers  from 
all  parts  of  the  city  itself.  As  in  European  cities,  chilled 
rooms  can  be  provided  into  which  perishable  produce  can 
be  unloaded  from  the  cars,  and  repacked  to  suit  the 
trade,  without  the  deterioration  inevitably  resultant  from 
unloading  in  a  warm  atmosphere.  Under  the  market 
hall,  cool,  clean  cellars  and  ample  cold  storage  facilities 


MUNICIPAL  MARKETS  119 

can  be  made  available  to  all  buyers  for  temporary  pur- 
poses at  reasonable  rates.  This  will  mean  goodly  savings 
in  transporting  costs  and  warehouse  facilities  and  will 
prevent  spoilage  and  lowered  values.  A  municipal  can- 
ning and  preserving  plant  conveniently  located  in  the 
building,  while  paying  for  itself,  will  further  prevent 
deterioration  and  waste. 

A  municipal  terminal  market  makes  for  many  econo- 
mies in  food  distribution.  By  delivering  cars  right  at 
the  wholesale  market,  all  trucking  from  the  railroad 
terminal  to  the  wholesale  market  will  be  eliminated.  The 
significance  and  value  of  this  saving  will  vary  with  each 
of  the  cities.  For  instance,  every  day  from  New  Eng- 
land quantities  of  fish  are  brought  to  the  freight  terminal 
on  the  Harlem  River  in  New  York  City,  and,  because 
of  the  lack  of  marketing  facilities  there,  are  then  loaded 
on  a  barge  and  taken  down  to  the  fish  market,  there  to 
be  sold,  only  to  be  again  carted  back  uptown.  As  the 
New  York  Market  Investigating  Commission  has  pointed 
out,  a  municipal  market  and  distributing  depot  in  the 
Lower  Bronx  on  the  Harlem  River,  at  a  point  of  con- 
venient access  to  the  railroads  and  water  lines,  will 
eliminate  much  of  this  useless  trucking.  It  is  safe  to 
estimate  that  a  terminal  wholesale  market  will  save  at 
least  ten  to  twenty  dollars  a  car  in  hauling  costs.  It 
will  effect  even  greater  economies  in  time,  in  interest  on 
investments  and  in  facilitating  the  marketing  of  the  food 
supply.  At  many  railroad  terminals  there  are  such  pri- 
vate wholesale  markets  now.  But  they  are  not  adequately 
regulated,  they  are  not  supervised  by  public  officials,  and 
they  are  not  coordinated  with  the  terminals  of  other 
steam,  electric  and  water  lines. 

A  wholesale  market  would  attract  not  only  retail  deal- 
ers, large  and  small,  but  also  the  larger  consumers,  such 
as  hotel  and  restaurant  managers,  and,  more  pertinent 


120  LOWER  LIVING  COSTS  IN  CITIES 

still,  would  make  possible  an  increased  amount  of  co- 
operative buying  through  consumers'  leagues  and  con- 
sumers' cooperative  associations.  This  direct  buying 
without  the  retailer  as  an  intermediary  is  definitely 
furthered  by  fixing  the  quantities  that  can  be  offered  at 
wholesale  at  relatively  small  amounts.  In  the  wholesale 
market  at  Havre,  France,  merchandise  may  be  offered 
for  sale  in  such  small  quantities  as  6  ordinary  sized 
bunches  of  vegetables ;  9  quarts,  or,  when  sold  by  weight, 
ii  pounds,  of  fruits  and  vegetables — even  this  minimum 
being  reduced  by  half  during  April  and  May;  vegetables 
which  it  is  customary  to  sell  by  count,  such  as  cabbages, 
cucumbers,  tomatoes,  etc.,  I  dozen;  oranges  and  lemons, 
I  dozen;  large  vegetables,  such  as  cantaloupes,  melons, 
etc.,  in  as  small  quantities  as  one  of  each.  In  Lyons, 
quails,  partridges,  ducks,  etc.,  are  put  up  in  bunches  of 
half  a  dozen  or  a  dozen;  eggs  in  lots  of  100;  oysters  in 
boxes  of  100;  butter  in  lots  of  50  pounds.  With  sales  in 
such  small  quantities  as  these,  the  smaller  consumers, 
through  cooperation,  and  the  larger  consumers  every- 
where can  buy  with  but  one  intermediary  between  them 
and  the  farmer,  and  that  a  public  auction  department 
that  adds  but  2  per  cent,  to  the  cost  of  goods. 

Buyers  can  further  be  attracted  to  such  markets 
through  careful  municipal  inspection  of  the  quality, 
quantity,  weights  and  measures  of  all  foodstuffs  sold. 
Thus  at  the  wholesale  terminal  market  at  Paris,  supplies 
are  received,  inspected,  weighed  and  sold  to  retailers  and 
consumers  under  official  supervision  so  constant  and 
efficient  as  to  preclude  the  sale  of  unwholesome  food 
products  and  to  prevent  extortion  and  trickery. 

Of  greatest  value  to  the  wholesale  terminal  market, 
both  because  it  advertises  the  market  to  the  producers 
everywhere  and  because  it  gives  a  basis  for  comparison 
with  the  prices  secured  by  private  dealers,  is  the  publish- 


MUNICIPAL  MARKETS  121 

ing  of  a  daily  bulletin  giving  the  wholesale  price  of 
produce,  and  at  least  a  weekly  bulletin  giving  the  retail 
price  as  paid  by  city  consumers.  This  is  done  in  certain 
European  cities  with  telling  effect.  Thus  the  market  at 
Budapest  publishes  a  daily  bulletin  giving  the  wholesale 
price  of  produce,  and  a  weekly  list  of  retail  prices,  de- 
claring itself  not  to  be  responsible  for  any  controversy 
which  may  arise  as  to  results  thereof.  No  one  activity 
on  the  part  of  market  officials  could  more  forcefully 
stimulate  direct  marketing  than  such  published  bulletins. 
Farmers  could  then  have  reliable  information  as  to  what 
prices  they  could  secure  at  wholesale  and  what  prices 
they  could  secure  by  selling  their  articles  directly  to 
consumers. 

The  economies  and  savings  effected  by  well  located, 
properly  administered,  carefully  inspected  wholesale 
terminal  markets  are,  indeed,  of  no  mean  proportions. 
Mr.  John  C.  Covert,  Consul  at  Lyons,  says  of  the  results 
attained  by  the  wholesale  market  there:  "During  the 
auction  the  market  women  and  the  keepers  of  small 
groceries,  fish,  fruit,  and  vegetable  stores,  fill  the  space 
in  front  of  the  auctioneer  to  replenish  their  stocks.  This 
market  is  most  emphatically  favorable  to  the  poorer 
classes.  Many  poor  people  bid  off  a  bunch  of  game  or 
fish,  dividing  the  expense  among  themselves,  thus  pro- 
curing a  luxury  that  they  could  not  otherwise  enjoy.  It 
creates  a  center  in  the  city  to  which  food  comes  from 
many  points,  largely  increasing  the  supply.  It  reduces 
the  prices  of  retail  dealers  in  the  market  and  sharpens 
competition.  The  auctions  are  always  public  and  the 
woman  who  buys  of  a  small  dealer  often  knows  just 
how  much  the  dealer  paid  for  the  article  in  the  market 
that  morning." 


122  LOWER  LIVING  COSTS  IN  CITIES 

RETAIL  MARKETS 

But  the  terminal  wholesale  market  will  not  alone  £11 
all  the  city's  needs.  The  city's  scattered  business  of 
wholesale  marketing  cannot  all  be  attracted  to,  or  forced 
by  legislation  into,  a  single  terminal  market.  The  rapid 
suburbanization  of  cities  calls  for  an  equally  rapid  sub- 
urbanization in  food  distribution.  While  the  big  whole- 
sale market  will  afford  facilities  for  large  food  move- 
ments to  and  from  the  primary  markets,  yet  the  city 
consumer's  own  needs  require  as  well  near-by  retail 
markets. 

The  second  essential  to  an  adequate,  constructive 
municipal  market  policy  is  the  adaptation  of  the  city's 
retail  markets  to  movements  of  population  and  to  the 
city's  environmental  needs.  As  residential  centers 
change  district  markets  decay.  Stall  rentals  must,  there- 
fore, be  sufficient  to  provide  depreciation  and  replace- 
ment funds  so  that  markets  may  be  relocated  in  order 
to  follow  population  movements.  The  typical  European 
market  system  includes  the  central  wholesale  terminal 
market,  as  above  described,  where  retailing  is  also  per- 
mitted, and  a  number  of  branch  retail  markets.  Thus 
in  Paris,  there  are,  in  addition  to  the  Holies  Centrales, 
33  small  retail  public  markets.  In  Budapest  there  are  one 
central  and  six  branch  markets.  In  Antwerp  there  are 
two  covered  and  nineteen  open-air  markets.  The  decline 
in  certain  retail  markets  due  to  population  movements  or 
a  decline  in  their  relative  importance  as  in  certain  Euro- 
pean cities  due  to  public  auction  sales  of  small  quan- 
tities, have  both  been  wrongly  used  to  bolster  up  the  con- 
tention that  district  retail  public  markets  are  inadvisable. 

Not  only  must  the  retail  municipal  market  be  adapted 
to  population  movements,  but  it  must  also  be  adapted 


MUNICIPAL  MARKETS  123 

to  modern  conditions  and  usages.  The  retail  unit  char- 
acteristic of  the  day  of  the  telephone  and  central  supply 
station  is  a  small  store,  such  as  the  Acme  Tea  stores, 
the  United  Cigar  Company  stores,  the  Horn  and  Hardart 
restaurants,  where  there  is  a  quick  turnover  of  capital, 
and  where  delivery  charges  are  low.  The  retail  munici- 
pal market,  to  be  successful,  must  adapt  itself  to  this 
tendency.  Its  size  will,  therefore,  depend  on  the  num- 
ber of  buyers  round  about  and  will  be  different  for  each 
city  and  in  each  section  of  the  same  city.  It  need  only 
be  large  enough  to  offer  a  sufficient  variety  to  the  pur- 
chaser to  tempt  him  to  come  there  to  buy.  Its  success 
or  effectiveness,  therefore,  cannot  be  measured  solely 
by  the  number  of  stall  renters  or  purchasers.  To  com- 
pete with  modern  retailing  methods  there  must  be  co- 
operative deliveries,  and  to  compete  with  the  central 
buying  concerns  there  must  be  cooperative  buying  among 
the  stall  renters.  In  general,  through  their  associations 
or  otherwise,  the  stall  renters  must  form  an  aggressive, 
competing  unit,  fully  cognizant  of  the  advertising  value 
of  public  inspection  of  their  foodstuffs  and  public  super- 
vision of  their  sales  practices. 

If  municipal  markets,  wholesale  or  retail,  are  to  be  of 
the  greatest  social  value,  every  effort  must  be  made  to 
encourage  their  use  by  farmers  and  other  food  growers. 
The  market  of  former  days  was  essentially  a  place  where 
producer  and  consumer  met.  But  today  the  stall  renters 
in  the  markets  of  the  American  city  of  any  size  are  al- 
most all  professional  retailers  and  in  no  sense  farmers 
or  producers.  Thus  in  the  Old  South  Second  Street 
Market  of  Philadelphia,  the  larger  of  that  city's  two 
municipal  markets,  out  of  315  stall  renters,  there  are  not 
over  a  half-dozen  farmers.  Indeed  in  only  ten  of  that 
city's  forty-seven  wards  do  farmers  play  any  consider- 
able part  in  the  sale  of  foodstuffs,  and  even  in  these  ten 


124  LOWER  LIVING  COSTS  IN  CITIES 

wards  they  do  not  sell  to  over  10  per  cent,  of  the  people. 
The  time  should  come  without  doubt  when  the  difference 
between  producers'  and  consumers'  prices  will  not  tempt 
the  farmer  to  turn  salesman  for  his  own  goods.  But 
that  time  certainly  is  not  here  now. 

In  the  meantime,  and  indeed,  for  competitive  reasons, 
even  after  this  happy  state  is  reached,  every  encourage- 
ment and  protection  should  be  given  to  farmers  who  de- 
sire to  sell  at  the  city's  markets.  In  certain  of  Phila- 
delphia's markets  many  professional  retail  dealers  in  no 
sense  farmers  have  put  up  signs  proclaiming  themselves 
to  be  Bucks  County,  or  Montgomery  County,  or  Lan- 
caster County  farmers,  selling  only  goods  fresh  from 
their  own  farms,  when,  as  a  matter  of  fact,  they  have 
bought  the  goods  that  morning  at  wholesale,  or,  at  the 
best,  are  jobbers  who  buy  from  farmers.  Want  of  con- 
fidence results  as  purchasers  sooner  or  later  learn  of  this 
fraud ;  and  both  bona  fide  farmers  and  buyers  then  stay 
away  from  the  market.  City  ordinances  should  provide 
that  none  but  bona  fide  farmers  should  display  farmers' 
signs. 

Another  legal  obstruction  to  the  farmers'  use  of  city 
markets  in  Pennsylvania  is  the  fact  that  the  mercantile 
tax  laws  of  that  state  exempt  from  the  retailer's  tax 
the  farmer  who  sells  his  own  goods,  but  do  not  exempt 
him  if  he  brings  in  the  goods  of  his  neighbor.  In  the 
days  when  this  law  was  passed,  in  the  third  decade  of  the 
nineteenth  century,  this  statute  worked  no  hardship,  as 
it  let  into  the  city,  free  of  tax,  about  all  the  farmers  who 
chose  to  come  in,  that  is,  those  not  over  a  fair  day's 
drive  out.  But  now  in  the  days  of  trolley  freight,  the 
motor  truck,  the  gasoline  barge  and  better  roads,  the 
radius  of  possible  marketing  is  fivefold  what  it  then 
was.  Now  farmers  must,  to  pay  for  their  time,  bring  in 
their  neighbor's  goods  as  well.  To  amend  this  tax  law 


MUNICIPAL  MARKETS  125 

so  as  to  permit  this  would  largely  increase  the  amount 
of  food  produce  sold  directly  from  the  farmer  to  the 
consumer.  Of  like  inhibitive  effect  is  the  license  fee 
of  one  dollar  required  to  sell  poultry  in  Philadelphia. 
The  average  farmer  does  not  feel  it  worth  his  while, 
for  the  small  number  of  chickens  he  can  sell  at  any  one 
time,  to  take  out  the  license.  There  is  no  inspection  that 
accompanies  the  license;  it  is  primarily  a  source  of 
revenue  only.  These  are  small  things,  to  be  sure,  but 
the  tendency  is  to  multiply  such  small  restrictions  instead 
of  endeavoring  to  take  away  unnecessary  obstacles  and 
offer  every  inducement  to  the  .farmer  who  wishes  to  fre- 
quent the  city's  markets. 


THE  CURBSTONE  MARKET 

To  give  farmers  minimum  rental  costs,  at  slight  ex- 
pense to  the  city,  in  good  residence  locations,  many  cities 
in  America  and  Europe  have  set  aside  streets  for  open- 
air  or  curbstone  markets.  Vienna  has  forty  such  open 
markets;  Antwerp  nineteen.  The  rental  for  wagon 
space,  as  a  rule,  is  nominal  only.  Thus  in  Atchison, 
Kansas,  and  San  Antonio,  Texas,  a  charge  of  ten  cents 
a  day  is  made  for  each  wagon,  while  in  Buffalo  the  rate 
for  a  one-horse  vehicle  is  twenty-five  cents ;  for  a  two- 
horse  vehicle,  fifty  cents  per  day.  In  Brussels  the  charge 
is  one  cent  per  day,  while  a  bench  may  be  secured  for 
two  and  one-half  cents,  or  a  covered  stall  for  five  cents, 
furnished  and  set  up  by  the  city.  This  practice  of 
merely  nominal  rentals  for  stall  space  is  no  doubt  the 
correct  one.  Careful  inspection  will  be  necessary  to 
make  sure  that  all  space  renters  in  such  markets  are  bona 
fide  farmers.  If  other  vendors  are  allowed  to  use  such 
markets  at  all,  they  should  be  segregated  in  sections 


126  LOWER  LIVING  COSTS  IN  CITIES 

clearly  marked  by  placards  as  set  aside  for  vendors  not 
farmers.  This  is  done  in  Rochester's  market.  A  third 
section  could  likewise  be  set  aside  for  pushcart  vendors. 
All  licensees  must  be  required  to  deposit  their  refuse 
and  papers  in  rubbish  cans  with  secure  lids  and  every 
other  precaution  taken  to  keep  the  streets  sanitary  and 
clean.  Collapsible  counters  and  coverings  should  be 
available  for  use  in  sunny  or  in  rainy  weather,  to  be  re- 
moved by  their  owners  after  the  market  is  over. 

The  pushcart,  the  vendor's  wagon  and  the  open-air 
farmers'  markets  offer  the  cheapest  possible  store  at 
adaptable  locations,  and  thus  should  give  avenues  for 
food  distribution  at  minimum  costs.  While  there  can 
be  no  doubt  that  the  covered  market  will  be  the  better  in 
the  long  run,  yet  the  open-air  curbstone  market  offers  a 
good  temporary  method  of  attracting  farmers  and  of 
giving  consumers  an  opportunity  to  buy  directly.  Two 
and  a  half  miles  of  streets  in  Cleveland  are  lined  by 
1,300  farmers  and  400  hucksters.  Both  Baltimore  and 
Montreal  attract  1,500  wagons  each  market  day  by  their 
curbstone  markets.  The  results  of  such  a  market  in  Des 
Moines  have  been  described  as  follows:  "Between  100 
and  200  farmers  gather  on  the  City  Hall  lawn  and  in 
the  streets  adjacent  thereto  between  the  hours  of  5  and 
10  o'clock  in  the  morning,  without  paying  any  license  or 
rent.  They  are  permitted  to  sell  direct  from  their  wagons 
to  the  city  consumer.  The  result  has  been  that  they  have 
received  approximately  50  per  cent,  more  for  their 
produce  than  the  commission  men  paid  them  before, 
while  the  city  buyers  get  their  produce  for  approximately 
50  per  cent,  less  than  was  paid  formerly.  By  compelling 
the  sellers  to  display  large  cards  stating  whether  they 
are  gardeners  or  hucksters,  the  public  is  enabled  to  dis- 
criminate and  to  purchase  direct  from  the  man  who 
grows." 


MUNICIPAL  MARKETS  127 

The  Secretary  of  the  Chamber  of  Commerce  of  Okla- 
homa City  says  of  the  effects  of  the  curbstone  markets 
in  that  city :  "There  can  be  no  question  as  to  the  market 
having  reduced  the  cost  of  living  to  the  average  family 
in  Oklahoma  City.  Where  one  has  choice  of  all  manner 
of  farm  vegetables,  at  very  low  prices,  many  of  them 
are  purchased  and  more  of  them  used  than  ordinarily. 
Besides  farm  vegetables,  there  are  such  things  as  chick- 
ens, other  prepared  meats,  home-cooked  dishes  of  various 
kinds,  all  of  these  being  brought  on  the  market  for 
sale.  .  .  .  The  first  day  there  were  about  seventy  wagons 
present  on  the  market,  and  a  small  crowd  of  buyers. 
Within  a  few  weeks  we  counted  318  wagons  on  the 
street  (their  contents  valued  at  $5,000),  and  a  swarm- 
ing crowd  of  people  who  jostled  and  shouldered  each 
other  in  their  efforts  to  secure  the  choicest  first."  (Writ- 
ten September  14,  1912.)  Speaking  also  as  to  the  re- 
sults of  this  same  market,  another  writer  says :  "Actual 
figures,  comparing  the  retail  cost  of  all  kinds  of  food 
supplies  in  Oklahoma  City  with  those  of  a  year  ago, 
show  decreases  ranging  from  25  to  50  per  cent.,  nor  is 
this  the  only  benefit  the  city  has  obtained  through  the 
establishment  of  the  market,  for  the  facilities  for  the 
sale  of  farm  and  garden  produce  have  greatly  stimulated 
agricultural  settlements  in  the  vicinity.  Since  the  market 
was  established  more  than  twenty-five  families  have 
taken  up  small  tracts  adjoining  the  city,  for  truck  gar- 
dening, and  hundreds  of  inquiries  from  others  who 
wish  to  take  advantage  of  the  market  have  been  re- 
ceived." 

The  success  of  the  market  idea  having  been  fully 
demonstrated,  the  farmers  and  truck  gardeners  formed 
an  association  and  leased  a  large  building,  which  they 
converted  into  a  market  house  with  more  than  200  stalls, 
where  not  only  the  farmers  but  also  dealers  in  meat 


128  LOWER  LIVING  COSTS  IN  CITIES 

and  fish  and  bakery  products  are  brought  into  direct 
contact  with  consumers. 


ADMINISTRATION  OF  MARKETS 

Since  the  purpose  of  municipal  markets  is  to  give 
facilities  to  producers  and  lower  prices  to  consumers, 
stall  rentals  should  be  fixed  at  the  lowest  point  that 
will  mean  a  fair  return  on  the  investment  and  provide 
for  adequate  renewal  and  depreciation  funds.  This 
principle  has  been  fairly  well  carried  out  in  many  cities. 
A  fresh-meat  dealer  in  the  central  market  of  Paris  can 
rent  a  stall,  secure  the  service  of  attendants,  and  pay 
for  sweeping  and  cleaning  for  about  $6  per  week.  One 
who  sells  salted  meats,  tripe,  etc.,  can  get  through  the 
week  with  an  expenditure,  including  service  of  attend- 
ants, sweeping,  etc.,  of  about  $3.53.  Other  stalls  are 
still  cheaper.  Stalls  in  the  covered  secondary  markets  are 
rented  at  from  10  to  30  cents  per  day.  In  Berlin  the 
highest  rental  for  meat  stands  is  9^  cents  per  square 
meter  per  day  when  rented  by  the  month,  and  12  cents 
when  rented  by  the  day.  Fruit  stands  vary  in  rental 
from  5  to  9  cents  per  day.1  Stalls  in  any  one  of  the 
three  substantial  brick  market  buildings  in  Indianapolis 
may  be  rented  at  $2.75  to  $7.00  per  month. 

1In  Rotterdam  the  stall  rentals  for  vegetables  and  fruits  are 
$2  per  year,  20  cents  per  month  or  6  cents  per  week  for  a  space 
of  about  20  square  feet.  In  Birmingham  the  rents  for  stands 
in  the  wholesale  markets  average  about  18  cents  to  24  cents, 
with  an  occasional  40  cents  per  square  yard  per  week ;  while  in 
the  retail  markets  the  rents  for  stalls  and  shops  vary  from  24 
cents  to  $4.37  per  week,  according  to  position  and  class  of  busi- 
ness. Germany  has  subsidized  her  municipal  markets  by  a  law 
reducing  the  import  duty  one-half  and  railroad  charges  one- 
third  for  all  meat  sold  in  municipal  markets  or  by  cooperative 
societies. 


MUNICIPAL  MARKETS  129 

Even  with  such  moderate  stall  rentals,  there  seems  to 
be  no  difficulty  anywhere  in  running  markets  at  a  profit.1 
But  the  success  of  municipal  markets  must  never  be 
gauged  in  terms  of  profits.  The  city  should  be  satisfied 
to  get  a  reasonable  return  on  its  investment. 

Of  greater  importance  than  low  rentals  are  adequate 
and  proper  facilities  for  stall  renters  and  for  the  pur- 
chasing public.  The  public  must  have  clear  passage- 
ways and  fair  purchasing  opportunities.  All  noises,  sing- 
ing, acrobatic  performances  and  distribution  of  hand- 
bills must  be  prohibited  within  market  limits  and  within 
a  reasonable  distance  from  the  market.  Hawkers  and 
peddlers  must  be  forbidden  to  ply  their  trades  within 
at  least  five  hundred  feet  of  the  market.  The  terminal 
wholesale  market  will,  of  course,  have  maximum  trans- 
portation and  distribution  facilities  for  both  the  general 
and  the  country  trade,  with  railroad  tracks  on  both  sides 
to  facilitate  unloading,  with  ample  wharfage,  docking 
and  transshipping  machinery.  Each  of  the  small  mar- 
kets, where  possible,  should  have  branch  terminals, 
especially  from  all  the  transporting  agencies  that  reach 
out  into  the  surrounding  farming  communities.  Thus 
trolley  terminals  at  each  market  will  give  an  avenue  for 
direct  buying  in  less  than  carload  lots  and  an  easy 
and  popular  outlet  for  the  surplus  of  small  farmers. 
Good  direct  roads  will  encourage  wagon  and  motor- 
truck shipments,  while  wharfage  facilities  will  stimulate 
the  movement  of  food  by  water.  Not  only  can  such 

1  Paris  has  an  annual  profit  on  its  markets  of  about  $1,000,000 ; 
Berlin,  $135,000;  Liverpool,  $85,000;  Birmingham,  $156,000; 
Vienna,  $60,000;  Budapest,  over  $100,000;  Glasgow,  $14,000. 
There  is  likewise  a  profit  in  American  cities.  Boston  has  an 
annual  profit  on  its  markets  of  $60,000;  Baltimore,  $70,000;  New 
Orleans,  $79,000;  Buffalo,  $44,000;  Qeveland,  $27,000;  Washing- 
ton (D.  C),  $7,000;  Nashville,  $8,000;  Indianapolis,  $17,000; 
Rochester,  $4,000;  St.  Paul,  $4,000. 


130  LOWER  LIVING  COSTS  IN  CITIES 

markets  have  good  facilities  for  incoming  freight,  but 
the  stall  renters,  under  proper  cooperation  among  them- 
selves, and  with  the  market  officials,  can  also  effect 
economies  in  help,  in  ice,  in  storage,  and  in  deliveries. 
The  goal  should  be  the  elimination  of  unnecessary  costs 
to  all,  that  the  purchasers  may  secure  their  goods  at 
minimum  prices. 

But  minimum  prices,  it  must  ever  be  remembered, 
may  in  reality  be  unreasonably  high  prices,  unless  accom- 
panied by  honest  weights  and  honest  goods.  The  one 
great  social  and  advertising  advantage  of  municipal 
markets,  both  for  the  stall  renter  and  the  buyer,  is  the 
opportunity  afforded  by  the  very  nature  of  the  market 
to  enforce  the  laws  and  ordinances  aimed  at  adultera- 
tion, misbranding,  underweights,  and  false  measures. 
Buyers  will  ultimately  seek  out  the  well  regulated  and 
well  inspected  market.  By  protecting  its  citizens  through 
virile  inspection,  the  city  will  also  ultimately  further  the 
best  interests  of  the  stall  renters  themselves.  Inspectors 
of  the  Health  Department  visit  Baltimore's  market  daily. 
In  certain  European  cities,  such  as  Budapest,  all  meats 
must  be  inspected  before  they  can  be  offered  for  sale. 
Inspection  by  market  officials,  coupled  with  inspection 
by  city  and  state  food  inspectors,  should  make  it  almost 
impossible  to  sell  adulterated,  decayed,  misbranded,  de- 
teriorated, diseased  or  misrepresented  foods  or  goods  at 
the  city's  markets.  The  market  buildings  can  be  light, 
well  ventilated,  thoroughly  cleansed  and  wholly  sani- 
tary. Reasonable  regulations  can  be  made  as  to  screen- 
ing goods  from  flies  and  requiring  perishable  goods  to 
be  kept  properly  chilled. 

Health  officials,  however,  need  to  be  constantly  re- 
minded that  their  ends  are  to  be  attained  by  the  least 
expensive,  effective  means.  Food  contamination  means 
poor  health,  suffering,  and  oftentimes  death.  Health 


MUNICIPAL  MARKETS  131 

and  pure  food  officials,  who  must  prevent  these  disas- 
trous results,  are  not  always  careful  to  accomplish  their 
ends  by  the  least  expensive  yet  effective  means.  Foods 
must  be  protected,  even  to  be  cheap,  yet  the  method  of 
protection  should  not  of  itself  be  an  undue  burden  to 
the  business  man  and  the  consumer.  Through  sane 
regulations,  virilely  enforced,  the  municipal  market  can 
be  made  the  best  place  for  all  to  buy.  Stall  renters  as 
well  as  consumers  =  will  ultimately  profit  by  such  stand- 
ards. 

The  goods  offered  for  sale  in  markets,  especially  in 
those  located  in  the  poorer  districts,  need  not  be  limited 
to  foodstuffs.  In  the  markets  of  Antwerp  are  offered 
almost  everything,  from  vegetables,  meat  and  fish,  to 
second-hand  books,  old  clothes,  furniture  and  household 
goods.  In  the  markets  of  Budapest  are  found  hard- 
ware, toys,  underwear,  hosiery,  etc.  In  Prague  are 
found  kitchen  novelties  and  all  the  various  articles 
usually  found  in  the  American  ten-cent  stores.  In 
Lyons  there  is  a  special  market,  where  manufactured 
goods  can  be  sold  cheaply.  To  prevent  abuse,  each  class 
of  goods  can  be  restricted  to  prescribed  sections  of  the 
market.  The  sale  of  various  kinds  of  goods  at  the 
markets  will  both  entice  purchasers  and  facilitate  their 
buying  at  reasonable  prices.  Cheap  rents  mean  low 
prices,  and  low  prices  will  ultimately  mean  higher  real 
wages. 

Municipal  markets  have  secured  results.  In  Cincin- 
nati 60,000  people  flock  to  the  Saturday  market;  in 
Baltimore,  50,000  on  all  market  days.  Henry  G.  Gniffke 
thus  enumerates  the  results  secured  by  the  open-air  mar- 
ket in  Dubuque,  Iowa: 

i.  Dealer  and  consumer  come  together.  There  is  no  middle- 
man's profit  to  pay. 


132  LOWER  LIVING  COSTS  IN  CITIES 

2.  The  dealer  is  under  scarcely  any  expense  for  rent,  fixtures 
or  help. 

3.  For  over  99  per  cent,  of  the  stuff  sold  here,  there  has  been  no 
freight  bill  to  pay,  no  cost  of  crates,  refrigeration  or  boxes. 

4.  The  seller  has  no  real  waste,  because  he  can  always  dispose 
of  any  surplus  he  may  have  over  to  the  grocers,  the  shippers  and 
other  dealers,  besides  the  home  bargain  hunters. 

5.  The  purchaser  is  always  sure  of  fresh  stuff. 

6.  Supply  and  demand  fix  the  prices,  modified  by  the  demands 
of  the  shippers  for  other  towns  and  the  abundance  of  stuff  sent  in. 

7.  The  variety  to  choose  from  is  nearly  without  limit  at  some 
seasons. 

An  additional  advantage  of  the  market  comes  to  the  small  man 
who  has  a  surplus  that  he  has  raised.  He  can  bring  that  to  the 
market.  For  the  fee  of  from  5  cents  upwards  he  can  find  a  place 
where  he  can  sell  this  to  the  very  best  advantage,  with  really  no 
expense  attached  to  it.  This  also  applies  to  the  small  dealer  who 
goes  out  into  the  country  and  buys  truck  to  resell. 

Consul-General  Henry  W.  Diederich  says  as  to  results 
obtained  by  the  market  at  Antwerp :  "On  account  of  the 
cheap  rental  of  stalls,  merchandise  for  sale  in  the  mar- 
kets is  sold  at  prices  lower  than  those  prevailing  in  the 
stores  and  the  farm  and  dairy  products  and  vegetables 
bought  at  the  markets  are  fresher  and  usually  of  better 
quality." 

One  principle  as  to  market  success  has  not  been  suf- 
ficiently clear  to  the  buying  and  tax-paying  public,  and 
that  is  this :  The  value  of  the  market  to  the  city  and  to 
the  consumer  depends  entirely  on  the  efficiency  and  thor- 
oughness of  the  city's  market  superintendent.  Market 
failure  can  most  often  be  traced  to  the  sodden  interests 
or  the  narrow  vision  of  the  market  master.  Markets 
left  to  themselves  tend  to  become  but  groups  of  grasping 
retailers,  with  no  interest  in  public  standards  and  no 
vision  as  to  results  accruing  from  enforced  quality  for 
goods  and  decency  in  sales  practices.  Upon  the  adminis- 
trator of  the  market  depend  its  cleanliness,  the  effective- 


MUNICIPAL  MARKETS 


133 


ness  of  its  inspection,  and  the  extent  of  protection  to  the 
producer,  the  honest  retailer  and  the  consumer.  The 
value  and  effectiveness  of  the  market  as  an  agency  for 
distributing  goods  wholesale  at  lowered  prices  depend 
primarily  upon  the  rigidity  with  which  its  affairs  are 
administered.  The  official  in  charge  must,  therefore,  be 
of  high  character,  steadfast  in  standards,  with  power  to 
bring  all  stall  renters  to  high  business  standards,  and 
ability  to  attract  to  the  market  both  producers  and 
consumers.  A  market  thus  administered  will  be  a  vital 
and  uplifting  factor  in  feeding  a  city. 

In  need  of  as  careful  supervision  as  the  market  itself 
are  the  vendor  and  the  pushcart  peddler.  The  cheapest 
retail  store  of  the  day  is  the  pushcart,  often  obtained  at 
a  cost  of  25  cents  per  day,  or  a  vendor's  wagon.  Phila- 
delphia receives  twice  as  much  for  vendors'  licenses,  at 
$10  per  year  for  one  horse,  $15  for  two,  as  from  market 
stall  renters  at  from  $16  to  $20  per  year.  In  this  city 
and  others,  the  greatest  possible  abuses  in  sanitation,  in 
deceitfulness  as  to  the  quality  and  quantity,  in  food  de- 
terioration, occur  through  the  vendor,  especially  those 
of  the  pushcart  type.  Many  observers  doubt  that  the 
abuses  of  the  pushcart  vendor  can  ever  be  even  reason- 
ably abated  by  any  kind  of  supervision  at  all  commen- 
surate with  its  cost.  Unless  this  can  be  done  the  practice 
must,  to  be  sure,  be  prohibited.  If  permitted  at  all, 
it  should  be  limited  to  allotted  spaces  on  prescribed 
streets,  under  careful  supervision  by  the  city's  market 
superintendent.  Vendors  using  vehicles,  as  well  as  push- 
cart vendors,  should  be  clearly  distinguished  from  bona 
fide  farmers  who  wish  to  sell  on  the  street ;  through  pla- 
cards, deception  can  be  made  practically  impossible.  Ven- 
dors, even  though  they  are  farmers,  should  be  thought 
of  as  itinerant  stall  renters  and  should,  if  anything,  be 
more  carefully  supervised  than  the  stall  renters  in  the 


134  LOWER  LIVING  COSTS  IN  CITIES 

markets  themselves.  There  can  be  no  question  that,  in 
order  to  insure  a  uniform  market  policy,  vendors  should 
be  under  the  same  kind  of  inspection  and  administration 
as  are  the  city's  markets.  Under  proper  supervision,  how- 
ever, the  quality  and  quantity  of  foods  offered  by  such 
peddlers  can  be  sufficiently  guaranteed  to  warrant  their 
continuance,  especially  as  their  prices  are,  according  to 
several  bona  fide  investigations,  around  20  per  cent,  lower 
than  those  asked  by  other  retailers.1 

MUNICIPAL  SLAUGHTER-HOUSES 

A  second  civic  activity  by  which  a  more  direct  and 
especially  a  more  wholesome  route  can  be  secured  for 
foodstuffs  is  the  establishment  and  operation  of  munici- 
pal slaughter-houses.  Only  in  the  United  States  is  slaugh- 
tering to  any  extent  still  left  in  private  hands.  Of  the 
fifty  largest  towns  in  Germany  forty-three  own  their 
own  abattoirs  and  require  that  all  meats  sold  in  the  city 
shall  be  slaughtered  in  them.  Dresden  in  1910  finished 
an  immense  cattle  market  at  a  cost  of  $4,264,000,  the 
largest  and  most  completely  equipped  slaughter-house  in 
Germany.  Diisseldorf  has  a  million  dollar  slaughter- 

1  "The  McClellan  Commission  of  New  York  City  reported : 
'There  is  no  danger  to  the  community  from  the  food  supplies 
sold  on  pushcarts ;  the  quality  of  the  food  is  generally  as  good 
as,  and  often  better  than,  that  sold  in  neighboring  stores.'  In 
Manhattan  this  Commission's  investigators  found  pushcart  food 
'good'  in  71  per  cent,  of  1,952  cases,  'fair'  in  23  per  cent.,  'bad' 
in  I  per  cent.,  and  'injurious  to  health'  in  less  than  one-half 
of  I  per  cent.  The  Commission's  census  of  pushcart  peddlers 
resulted  in  finding  'between  4,000  and  5,000  plying  their  trade 
in  the  streets  of  New  York.'  Their  earnings  averaged  'from 
$12  to  $15  a  week.'  The  percentage  selling  food  in  New  York 
and  Brooklyn  was  identical — 69." — "Markets  for  the  People,"  p. 
60.  In  many  European  cities  the  supervision  of  these  vendors 
is  ample. 


MUNICIPAL  MARKETS  135 

house  in  which  all  the  meat  slaughtered  and  used  in  the 
city  is  inspected  by  municipal  veterinary  surgeons.  In 
Italy  every  town  of  more  than  6,000  inhabitants  is  re- 
quired to  build  and  maintain  its  own  slaughter-house. 
The  slaughtering  is  done  by  individual  butchers,' but  the 
city  provides  the  building,  keeps  it  clean,  and  furnishes 
veterinary  inspectors  to  examine  the  meats.  Even  in 
Russia  the  laws  for  a  quarter  of  a  century  have  required 
that  all  animals  for  food  purposes  must  be  slaughtered 
at  the  city  abattoir.  In  almost  all  of  the  other  coun- 
tries of  Europe,  as  well  as  in  South  America,  Egypt  and 
in  the  Far  East,  the  private  slaughter-house  has  been 
closed.  Not  since  the  time  of  the  first  Napoleon  have 
private  slaughter-houses  been  tolerated  in  French  cities. 
In  Switzerland,  Holland,  Denmark,  Austria-Hungary, 
Scandinavia,  slaughtering  has  been  in  public  hands  for 
years.  All  meat  in  Switzerland  for  public  sale  must  be 
either  slaughtered,  inspected  and  stamped  by  public  of- 
ficials at  public  abattoirs  or  slaughtered  by  private  con- 
cerns under  special  and  infrequent  permission. 

These  slaughter-houses  are  widely  used.  In  the  abat- 
toir at  Liege,  Belgium,  95,000  animals  are  slaughtered 
annually.  In  Milan,  Italy,  the  number  of  animals  slaugh- 
tered in  1907  totaled  166,277;  while  in  Birmingham, 
during  the  year  ending  March  31,  1909,  the  number  of 
animals  slaughtered  at  the  abattoirs  connected  with  the 
city  markets  totaled  101,981.  In  London's  great  cattle 
market,  at  Islington,  covering  75  acres,  erected  at  a  total 
cost  of  two  and  one-half  million  dollars,  nearly  200,000 
animals  are  slaughtered  annually.  The  value  of  the 
animals  slaughtered  in  Berlin's  abattoir  in  1905  was 
$55,000,000. 

In  not  over  half  a  dozen  cities  *  in  the  United  States 

1  Public  abattoirs  with  municipal  inspection  are  maintained  at 
Paris,  Texas ;  Montgomery,  Ala. ;  Nashville,  Tenn. ;  Dubuque, 


136  LOWER  LIVING  COSTS  IN  CITIES 

are  there  public  abattoirs  with  municipal  inspection.  It 
is  usually  thought  that  federal  inspection  is  adequate, 
but  only  half  the  animals  slaughtered  in  the  United  States 
come  under  federal  supervision.  Most  of  the  remainder 
are  slaughtered  in  private  abattoirs  in  or  near  the  cities. 
These  are  often,  all  too  often,  dirty  and  insanitary.  In 
many  instances  they  are  drained  into  near-by  streams 
and  frequently  the  offal  is  thrown  on  the  banks  to  de- 
cay or  to  be  eaten  by  hogs  or  rats.  Trichinosis  is  dis- 
seminated by  the  rats,  tuberculosis  by  the  hogs,  hog 
cholera  spread  through  the  farms  lower  down,  and  ani- 
mal parasites  carried  to  livestock.  Absence  of  inspection 
means  that  much  of  the  meat  is  unfit  for  human  con- 
sumption. 

As  with  the  city  market,  the  effectiveness  of  the  city 
abattoir  depends  primarily  upon  the  moral  and  social 
standards  of  the  supervisors  and  upon  the  reasonableness 
and  effectiveness  of  the  charges  and  regulations  made 
for  their  use.  The  possibility  of  double  inspection — 
on  hoof  by  a  veterinary  surgeon  and  of  the  meat  by 
a  trained  inspector — affords  every  possible  safeguard  to 
the  purity  of  the  city's  meat  supply.  A  system  of  checks 
can  be  devised  whereby  responsibility  for  careless  in- 

lowa,  and  Los  Angeles,  Cal.  The  following  thirty-five  cities 
in  the  United  States  now  have  ordinances  requiring  all  meat  or 
meat  food  products  sold  therein  to  be  federally  or  locally  in- 
spected, passed  and  so  marked :  Atlanta,  Ga. ;  Birmingham,  Ala. ; 
Bridgeport,  Conn. ;  Buffalo,  N.  Y. ;  Cleveland,  O. ;  Columbus, 
O. ;  Denver,  Colo. ;  Dubuque,  Iowa ;  Duluth,  Minn. ;  Elmira,  N. 
Y. ;  Eureka,  Cal. ;  Lafayette,  Ind. ;  Fulton,  N.  Y. ;  Haverhill, 
Mass. ;  Los  Angeles,  Cal. ;  Macon,  Ga. ;  Memphis,  Tenn. ;  Mil- 
waukee, Wis. ;  Nashville,  Tenn. ;  New  Orleans,  La. ;  Norfolk, 
Va. ;  Oakland,  Cal. ;  Omaha,  Neb. ;  Portland,  Ore. ;  Richmond, 
Ind. ;  Seattle,  Wash. ;  Shreveport,  La. ;  San  Antonio,  Texas ; 
San  Diego,  Cal. ;  San  Francisco,  Cal. ;  South  Omaha,  Neb. ;  To- 
peka,  Kan.;  Walla  Walla,  Wash.;  Winchester,  Va. ;  Saginaw, 
Mich. 


MUNICIPAL  MARKETS  137 

spection  can  at  once  be  placed  upon  the  negligent  or 
indifferent  inspector.  Likewise  essential  are  ample  cold 
storage  facilities.  The  cold  storage  facilities  of  the 
slaughter-house  at  Liverpool  accommodate  2,176,000 
carcasses.  Not  only  is  the  consumer  assured  that  his 
meat  is  fit  for  food  and  the  retailer  and  wholesaler  given 
ample  cold  storage  facilities  for  the  preservation  of 
the  meat,  but  the  costs  for  selling  are  so  low  that  con- 
sumers' prices  should  ultimately  be  more  reasonable. 

The  properly  conducted  public  abattoir  offers  an 
agency  of  no  mean  significance  whereby  a  wholesome  and 
direct  route  can  be  assured  to  the  producer. 

EXPRESS  AND  PARCELS  POST 

Wells  Fargo  and  Company  have  taken  a  step  toward 
the  solution  of  the  marketing  problem  by  the  crea- 
tion of  an  Order,  Commission  and  Food  Products  De- 
partment, the  aim  of  which  is  to  study  the  food  products 
problem  from  various  viewpoints,  and  to  encourage  and 
assist  growers  and  producers  by  aiding  them  in  finding 
suitable  markets  among  dealers  and  consumers,  and  in 
securing,  at  minimum  cost,  suitable  sanitary  packages  or 
containers  in  which  to  ship.  One  of  the  important  func- 
tions of  the  department  is  the  frequent  publication  of 
bulletins,  designed,  not  only  to  give  to  the  public  informa- 
tion as  to  what  the  department  is  doing,  but  also  to 
acquaint  them  with  unusual  offers,  such  as  the  shipment 
of  individual  packages  of  fruits,  vegetables,  etc.  The 
information  gathered  by  this  department  will  enable 
producer,  distributor,  carrier  and  consumer  to  keep 
more  closely  in  touch  with  one  another,  to  the  material 
benefit  of  all. 

Of  special  significance  also  is  the  new  parcels  post 
law,  under  which  farmers  and  consumers  have  at  their 


i38  LOWER  LIVING  COSTS  IN  CITIES 

disposal  mail  facilities  for  shortening  the  route  from 
producer  to  consumer.  An  experiment  worthy  of  note 
was  that  carried  out  by  the  local  post  office  at  Washing- 
ton, D.  C.  This  office  published  lists  of  farmers  and  truck 
gardeners  having  butter,  eggs,  vegetables,  etc.,  for  sale, 
and  furnished  such  lists  to  patrons  of  the  office  who 
would  likely  be  interested  in  dealing  directly  with  the 
producer.  The  following  post  offices  also  used  this  plan 
of  bringing  producer  and  consumer  together:  Birming- 
ham, Ala. ;  San  Francisco,  Cal. ;  Athens  and  Atlanta,  Ga. ; 
Rock  Island,  111. ;  Baltimore,  Md. ;  Boston  and  Lynn, 
Mass.;  Detroit,  Mich.;  St.  Louis,  Mo.;  La  Crosse,  Wis. 
In  recent  years  a  third  promising  method  of  direct 
marketing  has  been  developed  and  that  is  the  shipment 
in  a  hamper  or  similar  package  direct  from  the  producer 
to  the  consumer.  Any  kind  of  a  package  would,  of 
course,  suffice,  but  the  more  stable  usage  is  a  return- 
able package  that  can  be  wired  and  sealed.  The  hamper 
used  by  Mr.  H.  B.  Fullerton,  Director,  Agricultural  De- 
velopment, the  Long  Island  Railroad  Company,  Med- 
ford,  Long  Island,  when  filled  weighs  about  thirty 
pounds,  and  contains  selected  vegetables  and  fruits,  such 
as  four- full-quart  basket  of  potatoes,  four-full-quart  bas- 
ket of  tomatoes,  four-full-quart  basket  of  lima  beans, 
four-full-quart  basket  of  apples,  four-full-quart  basket  of 
corn,  from  ten  to  fifteen  ears  in  accordance  with  variety, 
two  large  bunches  of  radishes,  two  bunches  of  onions  and 
a  bunch  of  parsley.  Mr.  Sprackland,  of  Barrington,  New 
Jersey,  has  used  a  farmer's  basket  weighing  twelve  and 
one-half  pounds.  This  basket  is  eighteen  inches  long, 
twelve  inches  wide  and  nine  inches  deep.  It  contains : 
one  quart  of  lima  beans ;  one  quart  of  tomatoes ;  one  small 
head  of  cabbage ;  one  quart  of  string  beans ;  six  green 
peppers,  and  one  bunch  of  "pot  herbs"  containing  eight 
different  vegetables  and  seasoning  herbs.  Mr.  Fullerton's 


MUNICIPAL  MARKETS  139 

special  reason  for  giving  this  method  careful  attention 
was  that  "in  many  instances  our  returns  from  the  New 
York  merchants  did  not  cover  cost  of  material  used  in 
packing  and  expressage,  much  less  labor  entailed  in  plant- 
ing, cultivating  and  harvesting."  The  result  has  been  an 
unexpected  demand  for  the  hamper  from  Michigan,  Illi- 
nois, the  southern  states,  and  even  France,  and  reports 
have  invariably  come  back  "Hamper  received.  Contents 
in  perfect  condition." 

The  more  extended  use  of  such  methods  of  direct 
marketing  can,  without  doubt,  be  brought  about  by  the 
proper  development  of  a  parcels  post  system  with  rates 
based  on  cost  of  service  and  reasonable  returns  to  the 
government.  The  postal  express  of  Germany  and  Great 
Britain  has  made  for  an  increasing  number  of  just  such 
shipments  of  such  parcels  both  from  and  to  the  farmer. 
Invaluable  assistance  can  also  be  given  by  market  bu- 
reaus of  the  city  and  state  in  furnishing  to  farmers 
the  names  of  bona  fide  urban  dwellers  who  wish  to  buy 
directly.  Direct  shipments  can  be  furthered  through  co- 
operation by  producers  with  the  central  distributing  sta- 
tion in  the  city,  if  need  be,  and  through  cooperation  by 
consumers. 


CHAPTER   XI 

STANDARDIZATION   AND   EFFICIENT   MARKETING 
THROUGH  PRODUCERS'   COOPERATION 

The  nationalization  of '  food  supplies  necessitates  the 
nationalization  of  marketing  methods.  The  nationaliza- 
tion of  marketing  methods  means  primarily  standardiza- 
tion of  products  and  packages  and  sales  through  market 
specialists. 

In  the  nineteenth  century  the  farmer  sold  through  a 
local  merchant  who  was  constrained  to  give  him  fair 
prices  in  order  to  retain  his  trade.  The  twentieth  cen- 
tury offers  distant  markets  at  cash  prices;  it  conse- 
quently necessitates  new  marketing  methods.  Goods 
must  be  stored ;  they  must  be  sorted  to  the  trade ;  they 
must  be  packed  for  longer  and  more  direct  shipments; 
the  best  market  must  be  found  and  maximum  returns 
obtained;  if  costs  are  to  be  kept  down,  purchases  must 
be  made  at  minimum  prices ;  money  and  credit  for  doing 
this  new  business  efficiently  must  be  economically  ob- 
tained. These  twentieth  century  necessities  to  profitable 
food  production  and  distribution  are  often  obtained  for 
the  average  farmer  with  best  results  and  least  expendi- 
ture through  cooperative  associations.  Better  returns 
to  producers  through  better  business  management ;  elimi- 
nation of  waste  and  decay  by  better  preservation  and 
more  direct  shipments;  economies  in  marketing;  better 
and  fresher  goods  to  consumers  at  prices  shaved  of  un- 
necessary costs — all  can  be  everywhere  furthered  by  co- 
operation among  producers.  The  twentieth  century  coun- 

140 


PRODUCERS'  COOPERATION  141 

tryman,  like  his  city  cousin,  best  furthers  his  prosperity 
and  individual  effectiveness  through  purposeful  coopera- 
tive action. 

Cooperative  selling  among  producers  gets  better  prices 
and  more  stable  returns.  Through  cooperation  farmers 
can  keep  a  market  specialist  at  work,  grading,  packing, 
stamping,  storing  and  selling;  watching  markets  with  an 
experienced  eye  and  more  than  paying  for  his  salary 
through  time  saved  to  the  farmer,  through  higher  prices 
and  through  the  elimination  of  sales  abuses. 

The  very  shortening  of  the  route  from  producer  to 
consumer  means  an  increased  amount  of  direct  buying 
by  jobbers  who  are  interested  in  paying  the  lowest  pos- 
sible price  in  order  to  make  -greater  profits  through 
retailing.  The  bona  fide  commission  merchant,  unin- 
terested in  retailing,  had  some  interest  in  getting  the 
highest  price;  as  the  greater  his  gross  returns,  the 
greater  his  gross  commission.  The  current  tendency  is 
for  direct  buying  by  jobbers  who  buy  to  sell  again  and 
hence  are  interested  in  giving  the  lowest  price  practicable. 
The  producer,  therefore,  must  have  greater  bargaining 
powe'r.  With  the  farmer,  as  with  the  laborer,  this  means 
collective  bargaining.  Through  cooperative  selling  only 
can  the  farmer  secure  equality  in  sales-making  power. 

From  every  land  and  clime  comes  golden  testimony 
as  to  the  value  of  cooperative  selling.  Through  the 
establishment  of  cooperative  elevators,  the  farmers  in 
northwestern  Minnesota  in  three  or  four  years  increased 
their  returns  on  wheat  from  fifteen  cents  to  twenty  cents 
per  bushel.  Nearly  two-thirds  of  California's  producers 
of  oranges  and  lemons  are  federated  under  the  Califor- 
nia Fruit  Growers'  Exchange.  This  Exchange  gathers 
information  about  crop  conditions,  about  market  de- 
mands, about  daily  sales  and  prices,  maintains  bonded 
agents  in  all  the  primary  markets,  handles  all  claims, 


142  LOWER  LIVING  COSTS  IN  CITIES 

conducts  litigation,  looks  after  general  transportation 
matters,  carries  on  advertising  campaigns,  receives  all 
remittances,  accounts  for  all  receipts;  in  other  words,  it 
acts  as  a  scientific,  highly  specialized,  marketing  agency. 
Almost  all  of  the  lemons  and  oranges  grown  in  Cali- 
fornia, totaling  a  train  of  refrigerated  cars  about  320 
miles  long,  are  marketed  through  cooperative  associa- 
tions. The  Hood  River  Apple  Growers'  Union  of  Ore- 
gon, with  a  paid-up  capital  of  $25,000,  controls  the  pack- 
ing, storing,  shipping,  and  inspection  and  selling  of  the 
apples.  Since  its  organization  it  has  increased  the  price 
received  by  its  members  from  sixty  cents  to  two  dollars 
a  box.1 

Irish  cooperative  societies  have  done  a  total  business  in 

1The  Dassel  Cooperative  Association  in  Minnesota  sent  out 
in  the  year  ending  December  31,  1911,  180,000  dozen  of  eggs,  for 
which  its  members  received  nearly  $50,000  in  cash — $9.000  more 
than  they  would  have  received  under  the  old  system.  The  wool 
growers  of  the  Northern  Rocky  Mountain  Region  have  estab- 
lished large  warehouses  in  Chicago  and  Omaha  to  which  wool 
is  consigned  to  be  sold  by  representatives  of  the  association. 
Manufacturers  as  well  as  buyers  are  among  the  dealers.  The 
Monmouth  County  Farmers'  Exchange  of  Freehold,  New  Jer- 
sey, an  organization  of  market  gardeners  and  truck  growers, 
operates  through  a  territory  fifty  miles  in  length,  is  in  telephonic 
communication  with  all  of  the  thirty  loading  stations  and  with 
all  of  the  primary  markets.  It  receives  and  ships  the  products 
of  the  members,  makes  collections  and  distributes  the  proceeds. 
The  Cooperative  Agricultural  Society  of  England,  aided  by  the 
Agricultural  Organization  Society,  grades  and  distributes  farm 
produce,  and  informs  its  members  through  selling  agents  as  to 
the  quality  and  price  of  produce  in  the  various  urban  markets. 
In  1908  the  turnover  of  the  six  export  associations  of  Denmark 
amounted  to  over  $40,000,000.  Through  cooperative  associations 
the  farmers  of  Denmark  have  been  exporting  more  than  $90,- 
000,000  worth  of  butter,  eggs  and  meats  every  year.  Half  the 
total  annual  output  of  $20,000,000  of  the  exported  butter  of 
Ireland  is  sold  through  cooperative  creameries. 


PRODUCERS'  COOPERATION  143 

twenty-two  years  of  $125,000,000,  with  a  turnover  in 
1911  of  $15,000,000.  Space  forbids  the  enumeration  of 
other  similar  undertakings.  Such  a  survey,  however, 
indicates  more  forcefully  than  could  any  other  method 
the  far-reaching  social  and  economic  effects  of  coopera- 
tive selling. 

The  immediate  sequel  to  direct  selling  through  such 
associations  is  emphasis  upon  standardization  in  grading 
and  packing.  Herein  lie  savings  and  economies  of  no 
mean  proportions.  The  grower  is  encouraged  to  produce 
better  goods,  produce  and  packages  are  standardized, 
deterioration  and  decay  are  stemmed,  re-sorting  and  re- 
grading  at  heavier  urban  costs  are  eliminated,  and  a 
more  direct  route  of  the  goods  from  producer  to  con- 
sumer is  made  possible.  With  goods  and  packages 
standardized  the  wholesaler,  the  jobber,  the  retailer,  the 
consumer  can  buy  more  directly.  Risks  are  eliminated 
and  qualities  and  quantities  assured.  With  cooperation 
the  importance  of  standardization  is  brought  home  to  all, 
and  the  group's  standards  are  maintained  only  through 
vigilance  by  and  over  each  member.  It  is  this  fact  that 
makes  cooperation  a  more  efficient  standardizing  force 
than  the  efforts  of  isolated  individuals. 

The  California  Vegetable  Union  supervises  the  seed, 
the  planting,  every  detail  of  production  and  then  sorts, 
packs  and  ships  vegetables  to  the  eastern  markets.  The 
walnut  growers  of  California  through  their  cooperative 
association  assemble,  grade,  pool  and  market  their  nuts. 
Formerly  no  farmers  could  afford  to  ship  save  in  car- 
load lots,  and  many  growers,  therefore,  had  no  way  of 
disposing  of  less  than  carload  lots.  Now,  with  all  the 
nuts  pooled,  there  is  no  such  difficulty.  The  nuts  being 
well  graded  and  packed  find  a  ready  market  and  the 
middlemen's  and  speculators'  and  similar  charges  are 
saved  to  the  producer  or  to  the  consumer.  The  Aroos- 


144  LOWER  LIVING  COSTS  IN  CITIES 

took  Potato  Growers'  Association  of  Maine  grades  the 
potatoes  of  some  seven  hundred  producers  and  ships 
them  in  carload  lots  as  a  rule  directly  to  wholesale  or 
large  retail  dealers.  This  association  performs  the  ser- 
vice of  the  shipper,  commission  man,  broker  and  whole- 
saler, and  oftentimes  also  the  retailer.  In  England  agri- 
cultural societies  maintain  depots  and  selling  agents  in 
near-by  towns,  where  their  produce  is  distributed,  and, 
if  need  be,  regraded,  re-sorted  and  repacked.  The  effect 
of  such  cooperative  action  is  noticeable,  not  only  on  the 
members  of  the  cooperative  associations  themselves,  but 
also  on  neighboring  individual  farmers  who  are  thus 
stimulated  to  raise  better  goods  and  get  them  in  better 
shape  for  shipment. 

Closely  allied  with  the  sorting  and  packing  of  goods 
by  cooperative  action  are  the  standardizing  of  certain 
products  and  the  creation  and  advertising  of  brand  goods. 
An  illuminating  illustration  of  the  methods  and  results 
of  this  kind  of  work  is  furnished  by  the  Danish  Co- 
operative Export  Society,  organized  in  1895,  the  pur- 
pose of  which  is  to  standardize  output  and  bring  about 
greater  stability  in  price.  The  central  society  is  the 
federation  of  local  cooperative  associations.  Each  pro- 
ducer must  stamp  his  eggs  with  his  own  number  and 
that  of  the  group  to  which  he  belongs.  It  is  thus  possi- 
ble to  fix  responsibility  not  only  up6n  the  farmer  but 
also  upon  his  cooperative  society  as  well.  Fines  await 
the  delinquent  farmer.  Because  they  are  always  fresh, 
well  sorted,  well  packed  and  guaranteed,  the  eggs  sold 
by  this  society  bring  fancy  prices.  Its  total  export  busi- 
ness in  1908  was  more  than  $6,600,000.  Certain  Irish 
poultry  product  associations  not  only  stamp,  sort  and 
pack  the  goods,  as  does  this  Danish  society,  but  pay  for 
eggs  entirely  by  weight  instead  of  by  number.  The 
poultry  and  eggs  thus  handled  are  sold  in  the  British 


PRODUCERS'  COOPERATION  145 

market  by  a  central  sales  manager,  who  receives  a  small 
commission.  The  result  has  been  increased  returns  to 
the  Irish  producer. 

In  this  country  the  Growers'  and  Shippers'  Exchange 
of  Rochester,  New  York,  has  had  noteworthy  success  in 
standardizing  both  farmers'  goods  and  prices.  Packages 
are  used  small  enough  to  pass  through  the  hands  of  re- 
tailers without  losing  their  identity.  Thus  apples  are 
marketed  in  pasteboard  cartons,  holding  a  peck  each. 
Potatoes  are  shipped  in  fifteen-pound  sacks,  and  grapes 
in  four-pound  baskets.  Each  package  bears  the  label 
of  the  exchange.  The  result  has  been  that  the  producer 
gets  from  seventy  to  eighty  cents  out  of  the  consumer's 
dollar  instead  of  thirty-five  cents  as  formerly.  By  stand- 
ardizing, labeling  and  branding  its  goods,  the  New  Eng- 
land Cranberry  Sales  Company  has  made  for  efficient 
selling  methods  and  for  nation-wide  standards  in  cran- 
berries. The  Rocky  Ford  Melon  Growers'  Association 
of  Colorado  through  rigid,  accurate  grading  and  stand- 
ardizing and  the  most  careful  packing,  has  made  the 
Rocky  Ford  melon  famous. 

The  results  of  such  standardization  are  of  far-reach- 
ing import.  When  the  brand  or  standard  of  goods  is 
known,  and  when  the  containers  are  standardized,  the 
routing  from  producer  to  consumer  is  shorter  and  made 
much  less  expensive.  There  is  a  stimulus  to  high-grade 
goods,  and  the  retail  price  through  advertising  and  cus- 
tom soon  becomes  fixed.  The  opportunities  for  retailing 
abuses  in  prices,  in  weights  and  measures,  in  adultera- 
tion, in  substitution,  are  thus  reduced  to  a  minimum.1 

1  Steps  other  than  the  standardization  of  goods  are  being 
taken  by  many  cooperative  societies  in  order  to  further  sales, 
increase  returns  and  augment  output.  More  potent  than  any 
other  one  factor  in  giving  Denmark  her  supremacy  in  the  dairy 
industry  have  been  the  Dutch  cooperative  cow  testing  associa- 


146  LOWER  LIVING  COSTS  IN  CITIES 

Of  importance  equal  to  that  of  increasing  sales  re- 
turns is  decreasing  production  costs.  This  cooperative 
societies  have  done  in  two  ways :  ( I )  by  direct  pur- 
chasing, and  (2)  by  securing  loans  to  farmers  through 
agricultural  credit  societies.1 

tions.  In  1908  thirty-four  Danish  cooperative  bacon  factories, 
with  a  total  membership  of  about  93,000  farmers,  slaughtered 
$1,600,000  worth  of  hogs  to  supply  a  rapidly  growing  trade. 
Cooperative  poultry  associations  in  Scotland  and  Ireland  have 
bettered  the  strain  of  the  stock  owned  by  their  members  through 
the  procuring  of  pedigreed  breeding  animals,  through  the  en- 
couragement of  scientific  methods,  careful  management  and  sani- 
tary precautions.  Over  130  cooperative  agricultural  societies  in 
Bavaria,  selling  over  one-twenty-fifth  of  the  entire  Bavarian 
harvest,  have  taken  definite  steps  toward  increasing  the  farm- 
ers' storage  facilities.  Warehouses  and  cold  storage  facilities 
have  been  likewise  secured  by  cooperative  activity  in  the  United 
States  as  well  as  in  other  foreign  countries. 

A  recent  cooperative  activity  of  no  mean  import  is  the  buying 
and  operating  of  motor  trucks  in  order  to  give  farmers  a 
quicker  and  more  direct  route  to  their  markets.  Cooperative 
house-building,  banking,  insurance,  hospitals,  convalescent  homes, 
recreation  facilities,  exhibits  and  literature  are  other  typical 
activities  of  cooperative  societies. 

*The  advantage  to  farmers  of  buying  through  their  own 
agents  was  amply  illustrated  in  this  country  years  ago  by  the 
operations  of  the  Grange  or  the  Patrons  of  Husbandry.  The 
Grange  appointed  state  members  to  buy  for  individual  farmers. 
The  Ohio  agency  in  one  year  purchased  about  $1,000,000  worth 
of  goods.  The  discounts  enjoyed  by  members  varied  from  15 
to  50  per  cent.  Reapers  which  had  been  previously  sold  for 
$275  were  retailed  at  $175 ;  thrashing  machines  were  reduced 
from  $300  to  $200,  and  wagons  from  $150  to  $90.  In  Iowa  the 
Grangers  received  a  discount  of  40  per  cent,  on  sewing  ma- 
chines, 43  per  cent,  on  hay  forks,  and  25  per  cent,  on  harrows 
and  cultivators.  The  result  of  this  activity  was  apparent  long 
after  the  Patrons  of  Husbandry  ceased  to  operate  on  such  ex- 
tensive scales;  the  retailers  offered  better  prices  and  implement 
corporations  better  service. 

Illustrations  as  to  contemporary  direct  purchasing  for  farmers 


PRODUCERS'  COOPERATION  147 

The  economic  effects  of  cooperative  buying  are  three- 
fold :  ( i )  It  saves  money  and  thus  lowers  producing 
costs;  (2)  it  secures  better  prices  and  services  from 
retailers  and  manufacturers;  (3)  it  opens  to  the  public 
an  avenue  for  getting  facts  as  to  the  cost  and  value  of 
the  services  of  retailers. 

In  1911  the  value  of  foodstuffs  exported  from  the 
United  States  was  $385,000,000.  Yet  that  enormous 
total  is  but  76  per  cent,  of  the  amount  our  farmers  that 
year  paid  out  in  interest  charges  alone.  This  heavy  in- 
terest charge  represents  a  burden  on  production  of  as 
serious  consequence  to  the  consumer  as  to  the  interest- 
paying  farmer.  And  yet  a  burden  even  greater  than  this 
interest  charge  is  the  difficulty  farmers  have  in  getting 
adequate  and  proper  credit  facilities. 

Save  perchance  for  land  purchases,  farmers  naturally 
borrow  when  interest  rates  are  highest.  The  farming 

are  found  in  the  Irish,  Danish  and  English  agricultural  whole- 
sale societies.  By  cooperation  Danish  farmers,  through  a  great 
central  wholesale  agency,  in  1908,  purchased  goods  valued  at 
$17,500,000.  The  commodities  so  purchased  included  seeds,  fer- 
tilizers, machinery  and  in  fact  every  necessity  for  the  operation 
of  the  farm.  English  cooperative  agricultural  societies  are 
likewise  making  extensive  savings  to  English  purchasers.  The 
Irish  Agricultural  Wholesale  Society,  a  federation  of  numer- 
ous local  purchasing  societies,  is  able  to  pay  all  expenses  and 
effect  from  25  to  50  per  cent,  savings  to  the  farmers  on  fer- 
tilizers and  similar  goods.  It  has  improved  quality  as  well 
as  lowered  prices.  "For  instance,  all  the  seeds  it  handles  are 
now  guaranteed  for  purity  and  germination  and  with  all  its 
artificial  manures  goes  a  certified  analysis  of  their  contents.  All 
kinds  of  machines  not  purchased  outright  by  individuals  are 
sold  to  the  local  societies  to  be  hired  out  to  such  members  as 
do  not  need  the  exclusive  use  of  such  an  implement.  Finally, 
it  has  agitated  in  season  and  out  for  cash  dealings  between 
the  local  societies  and  their  members." — "Agricultural  Coopera- 
tion," Madison,  Wis. — Wisconsin  State  Board  of  Public  Affairs, 
1912,  pp.  23,  24. 


148  LOWER  LIVING  COSTS  IN  CITIES 

business  is  preeminently  seasonal  in  character.  Funds 
are  needed  in  the  fall  and  spring.  Under  our  currency 
and  credit  system,  this  means  greatest  scarcity  of  cash 
at  just  the  time  when  the  farmer's  need  for  cash  is 
most  urgent,  and  when  interest  rates  are  highest.  Not 
only  is  the  interest  rate  higher,  but  the  tight  money  mar- 
ket depresses  prices  just  when  the  farmer  has  most  need 
to  sell.  Moreover,  the  farmer  is  not  a  good  competitor 
for  credit.  His  methods  of  doing  business  are  often 
primitive  and,  because  of  the  diverging  interests  of  city 
and  country,  the  farmer  and  the  banker  have  little  op- 
portunity to  get  together  and  learn  each  other's  needs 
and  worth.  This  fact  also  tends  to  make  interest  rates 
higher.  The  result  is  as  Mr.  Leonard  G.  Robinson  has 
pointed  out:  "In  many  of  our  western  states  the  legal 
and  prevailing  rate  of  interest  is  twelve  per  cent.,  not 
reckoning  the  bonus,  commission,  expenses,  and  other 
subterfuges  invented  by  the  ingenious  money-lender,  and 
designed  to  circumvent  the  usury  laws  or  to  mollify  the 
public  conscience.  Conditions  in  the  East  are  no  better. 
Many  instances  have  been  brought  to  my  attention  in 
New  York,  New  Jersey,  Connecticut  and  Massachusetts, 
where  farmers  have  been  paying  25  per  cent,  and  more 
for  accommodations.  There  are  localities  not  many 
miles  from  New  York  where  the  farmer  cannot  obtain 
a  loan  on  a  gilt-edged  mortgage  because  the  local  sav- 
ings banks,  'the  banks  of  the  people,'  find  it  more  con- 
venient to  invest  in  the  bonds  of  the  Singapore  gas  works 
or  to  do  business  with  the  local  real  estate  operators."  l 
Twentieth  century  farming  is  essentially  a  business 
proposition.  Capital  is  needed  and  will  be  increasingly 
needed.  Farming  must  be  done  on  a  more  scientific 
and  careful  basis.  The  prosperity  of  the  nineteenth 

1  "Scientific  Farming  and  Scientific  Financing."  The  Annals  of  the 
American  Academy  of  Political  and  Social  Science,  March,  1913. 


PRODUCERS'  COOPERATION  149 

century  farmer  was  due  to  the  natural  increase  in  farm 
values,  which  came  inevitably  with  settlement  and  the 
growth  of  towns  and  came  despite  poor  farming  and 
business  methods.  In  the  first  ten  years  of  this  cen- 
tury the  appraised  price  of  land  in  the  United  States 
increased  118  per  cent.  It  is  reckoned  that  70  per  cent, 
of  our  farms  are  still  being  held  for  increased  land 
values  rather  than  as  current  business-paying  proposi- 
tions. If  our  farmers  are  to  be  owners,  not  tenants, 
and  if  they  are  to  adapt  themselves  to  twentieth  century 
purchasing  and  selling  conditions,  new  means  of  credit 
must  be  extended  to  them. 

Not  interminably  will  there  be  virgin  soils  to  exploit- 
In  the  West,  as  in  the  East  and  in  European  countries, 
attention  must  be  focused  on  soil  conservation  and  soil 
efficiency.  This  requires  money.  Credit  and  money  are 
also  needed  for  economic  marketing.  The  "back-to-the- 
farm"  movement  should  be  changed  to  a  "money-for- 
the-farm"  movement;  our  urgent  agricultural  need  is 
not  for  more  men  on  the  farm,  but  for  more  capital 
for  the  farm.  To  secure  this  capital  new  credit  agencies 
are  needed. 

Of  these  agencies  none  has  been  more  potent  else- 
where, or  has  greater  possibilities,  than  the  cooperative 
agricultural  credit  society.  By  such  agencies  for  mutual 
assistance  and  reliance,  each  farmer  can  transmute  into 
needed  funds  his  character,  his  capacity,  his  existing 
capital,  his  business  sense,  his  ability. 

The  farmer  needs  money  for  two  main  purposes:  to 
purchase  land  and  provide  for  permanent  improvements ; 
to  plant  and  then  to  move  and  market  his  output.  The 
first  requires  long-time  loans  and  may  be  called  land 
credit ;  the  second  requires  short-time  and  more  personal 
loans,  and  may  be  called  agricultural  credit. 

Land  credit  is  needed  in  the  United  States  both  for 


150  LOWER  LIVING  COSTS  IN  CITIES 

the  purchase  of  new  farms,  and  for  the  extension  of 
existing  farms.  Our  free  land,  save  some  good  scenery, 
is  gone.  Moreover,  the  size  of  the  twentieth  century 
farm  must  be  adapted  to  the  automobile  truck,  not  the 
ox  cart;  to  the  binder  and  the  gang  plow,  not  to  the 
grain  cradle  and  the  plow  with  the  wooden  share. 

The  oldest  credit  institution  extant  seeking  to  facili- 
tate land  credit  is  the  German  Landschaften.  These 
societies  lend  not  money  but  credit.  They  issue  bonds 
to  their  members  in  amounts  not  exceeding  two-thirds 
of  the  value  of  the  borrower's  land.  The  interest  rate 
rarely  exceeds  4  per  cent.1  Under  recent  Danish  legis- 
lation, any  laborer  who  has  one-tenth  the  purchase  price 
of  a  piece  of  land  can  borrow  the  other  nine-tenths 
either  from  a  society  bank  or  from  one  of  the  536  co- 
operative savings  banks.  The  purchase  price  is  then 
amortized  over  a  long  period.  The  result  has  been  a 
rapid  increase  of  independent  owners  of  farm  lands. 

Of  greater  regenerating  influence  than  the  land-credit 
societies  have  been  the  agricultural  credit  associations. 

1This  low  interest  rate  and  freedom  in  getting  credit  are 
due  to  the  vital  feature  of  the  system:  the  nature  of  the  joint 
guarantee.  Originally  the  first  claim  of  the  owner  of  a  delin- 
quent landschaft  mortgage  was  against  the  mortgagor  with  a 
second  claim  against  the  society.  Later  "the  societies  took  over 
direct  responsibility  for  payment  of  principal  and  interest,  and 
the  tangible  security  behind  the  evidence  of  indebtedness  given 
each  investor  became  an  undivided  interest  in  the  mortgage-assets 
in  the  society's  vault.  In  other  words,  investors  received  gen- 
eral lien  bonds  instead  of  particular  lien  mortgages."  An  im- 
portant element  in  the  security  behind  these  goods  is  the  col- 
lective promise  of  the  landlords  to  pay  them  promptly  on 
maturity.  This,  as  other  European  systems,  has  made  real  estate 
securities  so  safe,  convertible  and  cosmopolitan,  that  in  Europe 
they  sell  as  readily  as  government  bonds  and  thus  collect  and 
distribute  cheap  money  for  use  in  the  improvement  of  the  soil 
and  development  of  agriculture." 


PRODUCERS'  COOPERATION  151 

These  associations  lend  for  short  terms  on  personal  se- 
curity. The  basis  of  their  credit  is  faith  in  the  borrower 
and  confidence  in  community  dependability.  They  capi- 
talize the  people's  honesty. 

The  original  as  well  as  the  model  contemporary  as- 
sociations of  this  type  are  the  Raiffeisen  societies  of 
Germany.  The  principal  features  of  this  system  are: 
(i)  restriction  of  membership  to  people  living  within 
such  a  limited  area  that  they  are  well  acquainted  with 
each  other  and  may  keep  a  mutual  watch  on  the  uses 
made  of  borrowed  funds;  (2)  gratuitous  management; 
(3)  joint  and  several  unlimited  liability.  The  minimum 
legal  number  of  members  for  such  a  society  is  seven 
and  the  average  number  ninety-two.  That  is,  the  groups 
are  kept  down  so  that  each  member  can  know  well  every 
other  member.  The  only  man  paid  a  salary  is  the 
treasurer,  though  the  committeemen  are  sometimes  paid 
when  the  business  is  excessive. 

The  cost  of  management  represents  only  about  eigh- 
teen-hundredths  of  one  per  cent,  of  the  total  transac- 
tions. Ninety-two  per  cent,  of  the  Raiffeisen  societies 
still  keep  to  the  principle  of  unlimited  liability.  Es- 
tablished in  1849,  the  growth  of  these  societies,  in  es- 
sence small  rural  banks,  has  been  nothing  short  of 
stupendous.  In  1909  the  12,614  local  German  Raiffeisen 
societies  embraced  in  the  national  federation,  with  a 
total  membership  of  1,163,186,  loaned  a  total  of  $214,- 
694,794.  Their  working  capital  was  $461,089,632.  Of 
this  amount  85.2  per  cent,  were  savings  deposits  by 
members  alone,  and  only  1 1  per  cent,  came  from  outside 
stores.  Other  countries  have  accomplished  similar  re- 
sults.1 

1  The  Credit  Fonder  system  of  France  dates  from  1894.  Both 
short-  and  long-time  loans  are  made.  State  aid  is  given  through 
placing  considerable  sums  at  the  disposal  of  the  cooperative 


152  LOWER  LIVING  COSTS  IN  CITIES 

In  certain  countries  the  states  themselves  are  advanc- 
ing loans  to  farmers.  Typical  examples  of  the  methods, 
amounts  and  profits  accruing  from  such  a  movement  are 
found  in  the  following  facts.  From  the  time  of  the 
establishment  of  the  state  loan  system  in  New  Zealand 
in  1896  until  March  31,  1912,  $60,000,000  on  32,000  ap- 
plications had  been  loaned  by  the  government.  In  the 
year  1912  alone  the  total  loans  were  $10,000,000.  The 
New  Zealand  statutes  do  not  specify  the  purposes  for 
which  grants  shall  be  given.  No  advance  is  made  for  less 
than  $125  nor  for  more  than  $15,000.  A  profit  of  $300,- 
ooo  accrued  to  the  government  during  the  year  1911-12. 
In  Australia  *  money  is  loaned  to  farmers  on  mortgage 

banks.  Under  the  law  of  November  17,  1897,  the  bank  of  France 
must  advance  to  the  state  without  interest  a  loan  of  40,000,000 
francs  and  must  make  an  annual  payment  of  from  2,000,000  to 
5,000,000  francs.  These  sums  form  the  state  fund  out  of  which 
agricultural  credit  is  given.  Save  for  this  element  of  state  sub- 
sidy, the  credit  foncier  system  is  practically  identical  with  our 
building  and  loan  associations.  Loans  are  amortized ;  that  is,  in 
addition  to  the  interest,  an  amount  is  charged  to  pay  off  the 
debt  when  due.  These  local  banks  have  increased  from  309,  in 
1901,  with  a  membership  of  7,998,  to  3,338,  in  1910,  with  a  mem- 
bership of  151,621.  Their  total  loans  outstanding  on  December 
31,  1910,  were  about  $10,000,000. 

Belgium  has  its  cooperative  agricultural  rural  banks,  some 
460  in  number,  whose  total  loans  far  exceed  $2,000,000  a  year. 
In  Ireland  234  agricultural  cooperative  credit  societies  have  a 
loan  capital  of  $24,000,000  and  make  annual  loans  totaling 
$300,000.  These  Irish  credit  associations  borrow  at  very  low 
rates  from  outside  lenders  who  are  not  so  familiar  with  each 
man's  reliability  and  re-lend  to  members  in  small  amounts  at 
slightly  higher  rates,  according  to  the  local  standing  of  each 
member.  Forty  agricultural  cooperative  societies  in  England 
and  Wales  in  1910  granted  loans  to  their  members.  During 
the  year  1909-1910,  3,145  agricultural  societies  in  British  India 
granted  to  their  members  loans  totaling  $1,761,676. 

*The  term  of  loans  differs  throughout  the  various  Australian 
states:  In  West  Australia  it  is  thirty,  in  Victoria  thirty-one  and 


PRODUCERS'  COOPERATION  153 

security.  From  the  introduction  of  the  system  in  1894 
until  1910,  $35,000,000  was  advanced  to  settlers.  Two 
Canadian  provinces,  Nova  Scotia  and  New  Brunswick, 
enacted  legislation  in  1912  authorizing  their  govern- 
ments to  extend  aid  to  farmers  desiring  to  purchase  and 
improve  farm  lands.  This  is  the  first  legislation  of  this 
nature  in  Canada,  but  it  is  probable  that  similar  legis- 
lation will  sooner  or  later  be  placed  on  the  statute  books 
of  other  Canadian  provinces. 

The  principles  of  both  of  the  cooperative  agricultural 
credit  associations  and  also  of  state  aid  have  already 
been  adopted  on  a  small  scale  throughout  the  United 
States.  Cooperative  agricultural  credit  has  been  intro- 
duced in  the  United  States  by  the  Jewish  Agricultural 
and  Industrial  Aid  Society.  The  funds  of  this  society, 
organized  in  1900,  come  from  the  large  fortune  be- 
queathed by  Baron  de  Hirsch.  As  the  society's  funds 
are  limited,  it  does  not,  as  a  rule,  lend  money  where 
other  funds  can  be  obtained.  Thus  it  rarely  makes 
first  mortgage  loans.  During  the  last  twelve  years  it 
has  made  2,178  loans,  totaling  $1,25)6,114.  The' average 
loan  is  for  ten  years  and  is  around  $500,  with  an  interest 
charge  of  4  per  cent. 

Eight  states,  Idaho,  Indiana,  Iowa,  North  Dakota, 
Oklahoma,  Oregon,  South  Dakota  and  Utah,  now  per- 
mit the  investment  of  school  funds  in  farm  credits. 
Since  1890  the  state  of  Idaho  has  lent  $1,509,191.33  to 
farmers ;  and  in  the  twenty-two  years  of  operation  under 
this  system,  there  have  probably  been  not  over  six  fore- 
one-half,  in  Queensland  twenty-five  years.  Variation  also  occurs 
in  the  purposes  for  which  advances  are  made.  In  some  of  the 
states  a  loan  is  granted  for  fencing,  draining,  ring-barking,  clear- 
ing; in  others  for  the  paying  off  of  existing  liabilities,  while 
in  South  Australia  no  provision  is  made  as  to  the  purposes  of 
state  loans. 


154  LOWER  LIVING  COSTS  IN  CITIES 

closures.  The  amount  to  one  person  is  limited  to  $5,000 
and  interest  at  7  per  cent,  is  charged.  In  Oregon,  from 
1857  to  October  i,  1910,  $5,078,144.95  was  loaned  under 
the  state  loan  system.  Interest  is  charged  at  six  per 
cent,  and  not  less  than  $250  nor  more  than  $5,000  can 
be  borrowed  by  any  one  person.  Since  1896  Utah  has 
advanced  $1,089,175.47,  of  which  $387,239.97  has  al- 
ready been  repaid.  There  is  need  for  encouraging  pro- 
ducers' cooperation  in  the  United  States.  This  encour- 
agement and  assistance  can  be  secured  (i)  through  self- 
aid  and  (2)  through  governmental  cooperation. 

Producers'  cooperative  societies  in  the  United  States 
can  now  best  further  their  own  growth,  usefulness  and 
effectiveness  by  more  extensive  federation,  by  centraliza- 
tion of  control,  and  by  publicity  and  education  as  to  the 
benefits  of  such  cooperative  activities.  The  prerequisite 
to  cooperative  success  is  a  community  sense  and  a  social 
spirit.  No  force  is  more  potent  for  sustaining  weak 
associations,  for  educating  the  public,  for  giving  to  all 
the  strength,  courage  and  enthusiasm  of  numbers  than 
federation. 

For  governmental  aid  the  first  requisite  is  the  passage 
of  laws  that  will  further,  not  hinder,  cooperative  organi- 
zations. Dr.  James  Ford  in  his  study  of  "Cooperation 
in  New  England"  (1913)  finds  that  "the  New  England 
states  not  only  fail  to  offer  special  privileges  to  co- 
operative associations,  but  also  by  their  laws  and  prac- 
tice undoubtedly  hinder  the  formation  and  operation  of 
such  societies.  Connecticut  and  Massachusetts  .  .  .  re- 
quire a  minimum  of  seven  men  to  found  a  cooperative 
society  and  $1,000  as  minimum  capital.  They  further 
provide  that  no  member  shall  hold  over  $1,000  in  shares, 
nor  have  over  one  vote.  There  shall  be  no  distribution 
of  profits  before  at  least  10  per  cent,  of  net  profits  are 
applied  to  a  sinking  fund  and  until  the  fund  amounts 


PRODUCERS'  COOPERATION       155 

to  a  certain  percentage  of  the  capital  stock — in  Massa- 
chusetts to  30  per  cent.,  in  Connecticut  to  20  per  cent. 
These  'provisions  are  good  as  far  as  they  go,  but  they 
are  severe.  'The  $1,000  minimum  capital'  provision  at 
once  prevents  the  majority  of  newly  formed  societies 
from  incorporating,  thus  leaving  them  exposed  to  serious 
danger  from  enemies  within  and  without.  The  require- 
ment of  a  10  per  cent,  reservation  for  a  sinking  fund 
is  wise,  though  difficult  for  new  societies  which  desire 
to  justify  their  existence  by  large  dividends.  Further, 
incorporation  itself  is  expensive,  costing  in  addition  to 
annual  taxes,  $25  in  Massachusetts  and  $30  in  Connecti- 
cut." A  first  need  is  scrutiny  and  reorganization  of  our 
laws  as  to  cooperation. 

The  people  of  the  United  States  are  probably  not  yet 
ready  to  subsidize  producers'  cooperation  as  it  has  been 
subsidized  in  other  countries,  particularly  in  France  and 
Bavaria.  The  latter  state  has  advanced  nearly  $238,000 
in  loans,  at  about  2  per  cent,  interest,  and  $47,600  in 
the  form  of  subsidies.  Neither  are  the  people  of  the 
United  States  ready  to  extend  governmental  aid  through 
loans,  as  in  the  eight  states  mentioned  above.  But  it 
is  now  full  time  for  city,  state  and  national  market 
bureaus  to  further  the  interests  of  producers'  coopera- 
tion by  publicity,  by  information,  by  cooperation,  by 
encouragement.  Wisconsin  has  already  such  a  bureau 
in  operation. 

Such  governmental  bureaus  could  encourage  the  con- 
struction of  storage  warehouses  for  holding  perishable 
fruits  and  vegetables;  they  could  encourage  proper  sort- 
ing of  farm  produce ;  they  could  establish  a  bureau  of 
tests  to  issue  certificates  as  to  the  purity  and  quality 
of  goods  sent  out  by  individual  farmers  or  more  prac- 
tically by  cooperative  associations. 

No  more  significant  announcement  has  been  made  by 


156  LOWER  LIVING  COSTS  IN  CITIES 

the  national  Department  of  Agriculture  than  its  declara- 
tion of  June  25,  1913,  that  it  would  appoint  specialists 
to  study  cooperative  organizations  of  producers  and  con- 
sumers including  cooperative  marketing  associations 
of  farmers,  buyers'  cooperative  stores,  etc.  Intensive 
studies  will  be  made  of  typical  communities,  dealing  with 
special  products  and  will  assist  in  the  formation  of  new 
cooperative  enterprises.  An  expert  in  cooperative  ac- 
counting will  assist  such  organizations  to  keep  their  books 
and  records  effectively,  establish  cost  systems  and  fol- 
low-up methods  of  handling  goods  en  route  and  on 
sale."  Cooperating  with  these  specialists  will  be  spe- 
cialists on  marketing  perishable  produce,  on  prices,  on 
market  conditions,  on  the  market  news  service  dealing 
with  perishable  products,  on  transportation,  on  rates,  on 
routing  and  other  matters  concerned  with  the  speedy  and 
cheap  moving  of  products  to  centers  of  wholesale  and 
retail  demand. 

In  several  German  universities  there  are  specialized 
courses  on  cooperation.  The  universities  of  Leipzig  and 
Halle  pay  particular  attention  to  this  field.  Professor  Dr. 
J.  Conrad,  in  charge  of  the  seminar  on  cooperation  in 
the  latter  university,  states  the  purpose  of  the  seminar 
as  follows :  "The  seminar  is  maintained  before  all  to 
afford  students  in  all  branches  an  incitement  to  interest 
themselves  more  closely  in  the  subject  of  cooperation, 
so  that  later  in  life  as  ministers  of  the  gospel,  teachers, 
physicians,  lawyers,  and  jurists  in  various  fields  they  can 
assist  in  the  extension  and  development  of  cooperative 
organizations.  This  end  is  accomplished  even  if  the 
number  of  those  who  undergo  a  graduation  examination 
(that  is,  secure  a  degree)  is  limited." 

Our  farmers  are  tilling  their  soil,  financing  their  opera- 
tions and  marketing  their  produce  mainly  by  tradition. 
These  traditions,  adequate  in  the  early  nineteenth  cen- 


PRODUCERS'  COOPERATION  157 

tury,  are  obsolete  in  the  twentieth.  For  their  inade- 
quacy and  inefficiency,  every  producer  and  every  con- 
sumer daily  renders  up  his  tribute  in  higher  living  costs. 
Through  virile  cooperation  among  producers,  and 
through  the  cooperative  activity  of  every  agent  of  gov- 
ernment, scientific  knowledge  can  supplement  and  mod- 
ernize these  traditions  to  the  economic  advantage  of 
every  resident  in  the  United  States. 

From  the  point  of  view  of  the  city  dweller,  standardi- 
zation is  the  main  contribution  to  be  made  through  pro- 
ducers' cooperation.  Happily  other  forces  besides 
higher  profits  to  farmers  through  cooperative  action  are 
working  toward  this  same  end.  Chief  of  these  are  the 
large  primary  produce  exchanges  and  the  regulative 
state  bodies  created  to  fix  standards  as  to  the  weight, 
quality  and  purity  of  each  grade  of  the  leading  grains 
and  cereals  of  many  states.  These  forces  will  first  assure 
state  standards,  and  then,  with  the  assistance  of  national 
bureaus,  will  assure  national  standards. 


CHAPTER   XII 

WHAT   CONSUMERS'    COOPERATION    HAS   ACCOM- 
PLISHED 

Cooperative  associations  and  activities  among  con- 
sumers form  another  avenue  through  which  living  costs 
may  be  lowered  and  living  standards  raised. 

No  arguments  speak  so  glowingly  of  their  success  as 
their  growth  in  numbers,  in  activities  and  in  business. 
In  the  United  Kingdom  in  1910  there  were  1,555  con" 
sumers'  associations,  with  2,661,799  members,  in  the  Co- 
operative Union,  a  central  federated  body.  As  most  of 
these  were  heads  of  families,  this  membership  repre- 
sented one-fourth  of  the  entire  population.  In  1884 
British  cooperators  numbered  about  70,000  a  year.  In 
1912,  99,000  members  were  added.  The  share  capital  of 
these  consumers'  societies  was,  in  1910,  $170,000,000 
(£35,072,075),  doing  a  total  trade  of  $542,000,000 
(£111,582,799),  with  a  profit  of  $58,000,000  (£12,024,- 
816).  Nor  do  these  figures,  stupendous  as  they  are, 
represent  the  entire  cooperative  movement  in  the  United 
Kingdom.  In  addition  to  these  there  were  registered 
under  the  Industrial  and  Provident  Societies  Act  of 
1893,  2,953  societies,  with  a  membership  of  2,679,805, 
with  total  funds  of  $284,000,000  (£58,482,344).  There 
were  30,065  local  cooperative  associations  in  Germany 
in  1910;  23,520  of  these  report  a  membership  of  4,471,- 
721  and  property  valued  at  $152,000,000.  Such  is  typical 
of  the  way  that  consumers'  cooperative  associations  have 
grown  in  other  countries.  It  is  safe  to  say  that  the 

158 


CONSUMERS'  COOPERATION  159 

number  of  members  in  such  associations  in  all  countries 
has  easily  doubled  within  the  last  ten  years.1  In  the 
face  of  such  growth  and  numbers  no  arguments  are 
necessary  to  show  that  cooperation  has  been  tellingly 
used  by  consumers  in  their  battle  against  high  living 
costs. 

While  there  has  been  no  such  remarkable  growth  in 
the  United  States  yet  what  growth  there  has  been  has 
been  wholesome. 

In  1896  there  were  70  cooperative  stores  in  the  United 
States  with  a  membership  of  about  19,000.  This  num- 
ber by  1905  had  increased  to  350,  with  a  total  membership 
of  76,000,  a  capital  investment  of  $8,500,000,  and  an 
annual  principal  of  about  $265,000,000.  In  New  Eng- 
land alone  in  1913  one  hundred  workingmen's  coopera- 
tive stores  and  factories  conducted  an  annual  trade  of 
over  $25,000  each. 

By  consumers'  cooperative  associations  as  here  de- 
scribed are  meant  bona  fide  consumers'  cooperative  stores 
organized,  financed  and  operated  by  consumers.  Un- 
happily for  the  future  success  of  the  movement,  many 
recent  activities  have  been  labeled  cooperative  that  are 
not  so  in  any  true  sense.  As  palliatives  to  public  opinion 
and  in  lieu  of  better  wages,  certain  traction  and  indus- 
trial companies  have  recently  organized  so-called  co- 
operative stores.  These,  however,  are  financed  and 
operated  by  the  company's  representatives,  and  hence 
are  not  truly  cooperative ;  even  if  the  employees  secure 
goods  at  lower  costs,  such  stores  will  never  meet  the 
real  purposes  and  functions  of  cooperative  societies. 

*In  France  no  fewer  than  800,000  consumers  are  in  coopera- 
tive associations;  in  Austria,  500,000;  in  Russia,  300,000;  in 
Italy  and  in  Switzerland,  a  quarter  of  a  million  each.  Den- 
mark, Sweden,  Belgium  and  Finland  have  smaller  numbers,  al- 
though a  larger  percentage  of  the  population. 


i6o  LOWER  LIVING  COSTS  IN  CITIES 

The  most  significant  class  of  consumers'  cooperative 
associations  is  the  society  formed  by  individual  share- 
holding consumers  for  the  joint  purchase  and  for  the 
retail  of  commodities  to  themselves,  financing  and  op- 
erating cooperative  stores  for  this  purpose. 

In  Great  Britain  was  the  origin,  and  in  Great  Britain 
has  been  the  greatest  development  of  this  movement. 
The  first  cooperative  consumers'  retail  store  to  be  or- 
ganized on  fundamentally  cooperative  lines  was  the  now 
famous  Rochdale  store.  This  store  was  founded  in 
1844  by  a  few  poor  weavers  in  the  flannel  industry,  then 
out  of  work  and  hard  pressed.  They  decided  to  unite 
what  little  capital  they  had  under  the  following  rules: 

1.  Capital  should  be  of  their  own  providing  and  bear  a  fixed 
rate  of  interest. 

2.  Only  the  purest  provisions  obtainable  should  be  supplied  to 
members. 

3.  Honest  measures  should  prevail. 

4.  Market  prices  should  be  charged  and  no  credit  given  or  asked. 

5.  Profits  should  be  divided  in  proportion  to  the  total  amount 
of  purchases  made  by  each  member  (with  deduction  for  dividend 
and  education  as  herein  noted). 

6.  The  principle  of  "one  member,  one  vote"  should  obtain  as 
well  as  the  equality  of  the  sexes  in  membership. 

7.  The  management  should  be  in  the  hands  of  the  officers  and 
a  committee  elected  periodically. 

8.  A  definite  percentage  of  profits  should  be  allotted  to  edu- 
cation.1 

Those  cooperative  stores  grew  apace.  In  1909  there 
were  1,430  such  societies,  with  2,469,396  members,  a 
share  capital  of  $150,000,000  (£30,814,878),  and  profits 
of  $53,000,000  (£10,851,739).  This  represents  an  in- 
crease over  1899  °f  53  Per  cent,  in  the  number  of  mem- 
bers, an  increase  of  62.7  per  cent,  in  the  share  capital, 

1  Distributive  or  Store  Cooperation,  Wisconsin  State  Board  of 
Public  Affairs,  1912,  p.  7. 


CONSUMERS'  COOPERATION  161 

and  of  54.5  per  cent,  in  the  profits.  One  person  out  of 
every  five  in  the  entire  United  Kingdom  now  makes 
purchases  at  cooperative  stores.  These  stores  have 
spread  to  other  nations.  Thus,  in  Switzerland,  204 
Rochdale  stores  were  in  existence  in  1905,  having  a 
total  trade  of  thirteen  and  one-half  million  dollars.  In 
these  countries,  as  in  Great  Britain,  these  societies  have, 
as  a  rule,  kept  to  the  original  Rochdale  regulations  as 
enumerated  above.  Failures  have  annually  re-taught  the 
value  and  significance  of  these  pioneer  regulations. 

The  benefits  accruing  to  the  members  of  such  co- 
operative associations  are  twofold;  lower  actual  costs 
through  good  quality  and  honest  measures,  and  lower 
money  costs  through  annual  dividends. 

The  Rochdale  rules  that  "only  the  purest  provisions 
obtainable  should  be  supplied  to  members"  and  that 
"honest  measures  should  prevail"  have  been  carried  out 
in  practice  through  enforcing  a  third  rule  that  "market 
prices  shall  be  charged  and  no  credit  given  or  asked." 
By  maintaining  the  same  price  as  other  retail  stores  in 
the  neighborhood,  cut-throat  competition  is  avoided,  and 
the  neighboring  stores,  especially  when  they  find  that  the 
members  of  the  cooperative  store  remain  loyal,  stop 
using  militant  competitive  methods.  The  cooperative 
store  is  thus  enabled  to  survive.  By  refusing  credit, 
consumers  do  not  have  to  pay  each  other's  debts  through 
higher  prices  or  poorer  goods.  With  profits  no  longer 
the  whole  test  of  success,  managers  are  stimulated  to 
work  up  trade  by  giving  honest  quantities  and  reliable 
qualities.  The  plan  itself  takes  away  the  motive  to  de- 
ceive. Consumers,  owning  and  operating  the  store,  are 
never  so  dull  as  to  charge  themselves  dearly  for  bad 
goods  in  order  to  give  themselves  larger  returns  in  divi- 
dends. It  is  profits  through  deceit  that  make  men  wor- 
ship "the  devil  god  shoddy." 


162  LOWER  LIVING  COSTS  IN  CITIES 

That  this  type  of  cooperative  store  does  lower  costs 
through  reliable  qualities  and  measures  has  also  been 
proved  in  a  Rochdale  store  established  in  1912  in  Mont- 
clair,  New  Jersey.  Starting  in  May  with  a  capital  stock 
of  $6,000  and  200  stockholders,  it  closed  its  year  with 
314  stockholders,  a  5  per  cent,  rebate  on  the  gross  amount 
of  purchases  made,  and  a  business  aggregating  $100,000 
in  sales  for  the  year.  The  universal  testimony  from  the 
members  was  that  there  had  been  goodly  savings  through 
better  quality  and  honest  measures.  In  England  the 
establishment  of  a  cooperative  bakery  at  once  compelled 
the  near-by  bakers  to  improve  the  quality  of  their  bread. 
The  indirect  savings  to  consumers  through  cooperative 
stores  by  honest  quantities  and  reliable  quality  are 
incalculable  in  money  value. 

But  such  cooperative  stores  have  also  back  of  them 
millions  of  dollars  in  savings  expressed  in  dividends. 
The  trade  done  by  the  cooperative  societies  of  Great 
Britain 1  during  the  last  forty-three  years  totaled  nearly 
seven  billion  dollars;  their  profits  $750,000,000.  Divi- 
dends to  consumers  now  total  $50,000,000  annually. 
These  money  savings,  added  to  the  economies  through 
honest  quality  and  quantity,  represent  lower  living  costs 
of  telling  significance. 

The  dividend,  to  be  sure,  is  usually  spent  when  paid ; 
yet  it  is  sometimes  left  to  draw  interest  and  to  be  added 

1  Shares  in  these  cooperative  retail  stores  are  of  the  nominal 
value  of  £i,  and  may  be  paid  in  full  on  allotment  or  by  in- 
stalments, usually  of  3d.  per  week  per  share.  In  large  socie- 
ties the  only  cash  payment  required  is  is.,  the  balance  being 
paid  by  the  profits  to  which  the  member  is  from  time  to  time 
entitled  and  which  are  credited  to  his  share  account.  The  aver- 
age dividend  ranges  from  2s.  3d.  to  2s.  7d.  on  the  £  As  the 
store  becomes  able  to  dominate  prices  in  its  community,  the 
pressure  has  been  to  lower  prices  in  order  to  benefit  the  poorer 
classes  most  directly.  Dividends  have  consequently  been  lower. 


CONSUMERS'  COOPERATION  163 

to  the  share  accounts.  Instances  are  numerous  where 
many  members  utilize  this  investment  as  reserve  and 
allow  it  to  accumulate  in  order  to  pay  the  premium 
of  apprenticeship  or  to  pay  college  fees  or  for  reserve 
for  the  support  of  old  age.  Thus  money  saved  by  co- 
operative action  is  put  into  better  living  standards  as  well 
as  representing  lower  living  costs. 

Since  lower  operating  costs  mean  higher  dividends, 
members  cooperate  to  lower  delivery  costs.  Thus  in 
most  city  societies  an  agent  calls  at  members'  homes  at 
stated  intervals  to  receive  orders,  say  semi-weekly  or 
bi-weekly,  and  these  orders  are  delivered.  During  the 
intervals  between  such  deliveries,  the  members  take 
home  their  purchases  themselves. 

Closely  allied  to  such  cooperative  activities  in  the 
United  States  is  the  less  pretentious  association  of 
consumers  for  the  purpose  of  buying  in  large  quantities. 
When  bought  by  the  bushel  coal  costs  several  times  what 
it  costs  by  the  ton.  Buying  beans  by  the  bushel  basket, 
potatoes  by  the  barrel,  meat  by  the  carcass,  etc.,  is  all 
within  the  possibilities  of  almost  any  group  of  urban 
purchasers.  Housewives  in  numerous  cities  in  this  coun- 
try have  recently  combined  to  make  such  purchases,  to 
the  definite  economy  of  everyone  concerned.  One  ob- 
stacle to  cooperative  buying  in  the  United  States  has 
been  the  more  or  less  itinerant  character  of  the  city 
dwellers.  In  European  cities  families  know  each  other 
for  generations.  But  urban  populations  will  grow  more 
static  in  the  United  States  and  American  life  will  be 
less  full  of  dreams  and  more  replete  with  constructive 
plans.  Cooperative  buying  will  then  have  an  ever-larger 
place. 

Two  tendencies  among  wholesalers  and  other  middle- 
men tend  to  minimize  the  advantages  accruing  to  con- 
sumers through  cooperative  stores.  At  first,  other  re- 


164  LOWER  LIVING  COSTS  IN  CITIES 

tailers  tried  to  entice  or  coerce  wholesalers  and  job- 
bers to  make  higher  prices  to  cooperative  stores.  And 
then,  after  cooperative  stores  had  definitely  established 
themselves  and  wholesalers  found  it  necessary  to  sell 
to  them  anyway,  many  big  middlemen  and  manufac- 
turers raised  their  prices  to  cooperative  stores  on  the  the- 
ory often  openly  voiced  that  "cooperators  can  stand  the 
increase."  Consumers'  dividends  were  thus  dissipated 
into  middlemen's  profits.  The  result  was  a  demand  for 
"a  cooperative  source  of  supply."  Out  of  this  demand 
have  grown  in  the  United  Kingdom  alone  two  great 
wholesale  societies,  the  English  Cooperative  Wholesale 
Society,  Ltd.,  and  the  Scottish  Wholesale  Cooperative 
Society. 

Both  of  these  societies  are  federations  of  retail  asso- 
ciations. Their  prime  purpose  is  to  enable  the  retail 
stores  to  buy  more  advantageously.  To  this  end  their 
by-laws  empower  them  to  "carry  on  the  trades  or  busi- 
nesses of  wholesale  dealers,  bankers,  shippers,  carriers, 
manufacturers,  merchants,  cultivators  of  land,  workers 
of  mines  and  insurers  of  persons  and  property." 

The  Cooperative  Wholesale  Society  of  England  was 
founded  in  Manchester  in  1864  with  a  capital  of  £2,400. 
In  1899  its  capital  was  £2,829,501,  and  its  annual  sales 
£14,212,375;  ten  years  later  the  capital  was  £6,161,316 
and  the  sales  £25,675,938.  Its  total  net  sales  in  1912 
amounted  to  £26,000,000.  The  Scottish  Wholesale  So- 
ciety, organized  in  1869,  had  a  capital  by  1899  °f  ^l~ 
457,645  and  a  sales  business  of  £5,014,189;  ten  years 
later  the  capital  was  £3,346,873,  and  the  sales  £7,457,136. 
The  total  sales  of  the  English  Wholesale  Society  in 
forty-eight  years,  from  1864  to  1911,  were  £438,824,630, 
from  which  a  profit  had  accrued  to  members  in  divi- 
dends of  $36,000,000  (£7,206,076).  The  profits  of  the 
Society,  during  the  first  ten  years  of  the  century,  rose 


CONSUMERS'  COOPERATION  165 

from  $1,441,000  to  $2,314,350.  The  profits  for  1911 
reached  the  sum  of  nearly  $2,900,000,  this  being  2.07 
per  cent,  of  the  turnover.  In  December,  1912,  this 
society  returned  to  its  constituent  societies  $1,100,000 
as  their  share  of  the  $1,600,000  in  profits  made  during 
the  preceding  half-year  alone.  The  half-million  and 
more  dollars  remaining  was  retained  for  extending  the 
enterprises. 

The  amounts  and  character  of  the  business  of  these 
two  societies  are  both  large  and  varied.  Their  agents 
are  in  every  part  of  the  British  Isles,  and  of  the  en- 
tire world.  So  far  as  possible,  they  buy  directly  from 
producers,  whether  the  article  be  the  product  of  the 
factory,  the  farm,  the  forest,  or  the  mine.  The  impor- 
tations into  England  by  the  English  Wholesale  Society 
alone  in  1909  totaled  thirty-five  million  dollars  and 
originated  in  almost  all  parts  of  the  globe.  Moreover, 
the  two  wholesale  societies  have  also  become  very  ex- 
tensive manufacturers'  associations.  Their  banking  and 
insurance  operations  are  also  extensive  and  they  serve 
as  the  financial  agent  of  most  of  the  retail  societies. 
The  English  Wholesale  Society  to-day  boasts  the  four 
biggest  flour  mills  and  the  biggest  boot  and  shoe  fac- 
tory in  Great  Britain.  The  Scottish  Cooperative  Whole- 
sale Society  has  one  industrial  center  at  Shieldhall  that 
employs  8,000  workers.  The  business  premises  of  the 
English  Wholesale  Society  are  extremely  varied  in  na- 
ture, including  almost  every  conceivable  kind  of  manu- 
facturing establishment.  The  bacon  factory  has  been 
used  seven  years.  In  the  boot  and  shoe  works  at  Lei- 
cester 50,000  pairs  of  shoes  are  made  weekly.  As  many 
as  250  varieties  of  biscuits  are  prepared  by  the  bis- 
cuit works,  the  output  of  which  in  1911  was  £207,694. 
Other  departments  under  the  Cooperative  Wholesale 
Society  are  the  grocery  department,  the  cabinet 


166  LOWER  LIVING  COSTS  IN  CITIES 

factory,  the  clothing  factory,  the  printing  works, 
preserve  works,  vinegar  brewery,  flour  mills,  flannel 
factory. 

Both  the  English  and  the  Scottish  cooperative  socie- 
ties derive  their  capital  from  local  cooperative  societies. 
The  two  societies  render  every  assistance  to  each  other, 
and  in  certain  departments  have  joint  buyers  and  de- 
pots. In  1902  they  established  a  local  limited  partner- 
ship under  the  title  of  "Joint  Committee  of  English 
and  Scottish  Wholesale  Societies."  Under  this  joint 
control  certain  businesses  are  now  carried  on,  including 
the  owning  and  working  of  tea  estates  in  Ceylon,  the 
manufacture  of  cocoa  at  Luton,  and  the  blending  and 
packing  of  tea  in  London.  They  are  in  essence,  that  is, 
one  large  industrial  activity.  Their  total  sales  in  forty- 
nine  years,  ending  in  1910,  were  £2,187,388,929;  and 
total  profits  £209,027,417. 

The  local  cooperative  stores  buy  from  50  to  nearly  100 
per  cent,  of  their  total  purchases  from  these  wholesale 
societies ;  many  purchasing  as  high  as  90  to  95  per  cent., 
the  average  being  not  far  from  75  per  cent.  Some  of 
the  local  societies  maintain  their  own  shops,  factories 
and  farms,  and  thus  produce  the  articles  which  they 
dispense.  They  also  make  special  efforts  to  buy  di- 
rectly from  producers'  cooperative  societies,  when  pos- 
sible, thus  coordinating,  as  do  the  wholesale  societies, 
producers'  and  consumers'  cooperative  activities.  It  is 
this  interbuying  and  close  interrelationship  that  extend 
dividends  and  make  for  economies  and  savings  in  reli- 
able quality  and  honest  quantities. 

The  space  which  can  be  here  given  to  such  coopera- 
tive activities  necessitates  that  attention  be  focused  upon 
the  British  associations  as  types  of  what  has  been  and 
can  be  accomplished.  This  subject  cannot  be  left,  how- 
ever, without  some  reference  to  the  development  of 


CONSUMERS'  COOPERATION  167 

wholesale  societies  elsewhere.  The  French  society  was 
organized  in  1892.  By  1895  it  had  a  turnover  of  9,143,- 
129  francs  ($1,764,623.89),  representing  a  net  profit  of 
110,039  fr.  ($21,237.52).  The  total  trade  done  by  all 
European  wholesale  societies  amounted,  in  1900,  to  one 
hundred  and  twenty-five  million  dollars;  in  1910  it 
reached  over  two  hundred  and  twenty-five  millions.  In 
1911  the  total  exceeded  two  hundred  and  fifty  million 
dollars.  In  1899  the  Pacific  Coast  Cooperative  Union, 
one  of  the  most  flourishing  examples  of  cooperative 
wholesale  societies  in  the  United  States,  was  organized 
in  California.  This  company  is  owned,  and  controlled 
by  the  individual  retail  cooperative  stores  scattered 
throughout  Washington,  California  and  Idaho.  In  1905 
it  had  a  paid-up  capital  stock  of  $62,000,  and  yearly 
sales  of  $335,000.  Its  earnings,  other  than  those  re- 
quired to  pay  interest  upon  capital  stock,  are  divided 
among  the  stockholding  stores  in  proportion  to  the 
amount  of  their  purchases.  In  1902  there  were  outside 
of  Great  Britain  a  dozen  wholesale  societies;  in  1911 
there  were  seventeen  reporting  an  annual  business  of 
nearly  a  quarter  of  a  billion  dollars.  This  was  an  in- 
crease of  $18,500  over  the  profits  of  the  previous  year. 
No  wholesale  society  showed  a  decrease,  while  some 
almost  doubled.  In  Germany,  third  in  importance,  the 
increase  was  24  per  cent. ;  in  Hungary,  25  per  cent. ;  in 
France,  40  per  cent. ;  in  Belgium,  41  per  cent. ;  in  Bo- 
hemia, 58  per  cent. ;  in  Russia,  82  per  cent.  To-day 
there  are  no  fewer  than  twenty  national  wholesale  socie- 
ties in  as  many  different  countries. 

It  would  be  difficult  indeed  to  overestimate  the  savings 
and  significance  of  these  undertakings.  Profits  and  divi- 
dends, reliable  qualities,  honest  weights  and  measures, 
all  combine  to  mark  the  movement  as  the  most  signifi- 
cant economic  movement  of  the  twentieth  century.  No 


168  LOWER  LIVING  COSTS  IN  CITIES 

other  movement  is  more  freighted  with  possibilities  for 
better  living  at  lower  living  costs. 

Space  forbids  any  detailed  discussion  of  other  types 
of  consumers'  cooperation.  Passing  mention  must  be 
made,  however,  of  the  accomplishments  of  building  and 
loan  associations  in  the  United  States,  of  cooperative 
housing  schemes  in  Great  Britain,  and  of  cooperative 
loans  to  town  dwellers  in  Germany.  The  United  States 
League  of  Local  Building  and  Loan  Associations,  at 
their  annual  meeting  in  1912,  reported,  for  the  year 
1911-1912,  6,099  building  and  loan  associations  in  twenty- 
seven  states,  with  a  total  membership  of  2,332,829  and 
with  total  assets  of  $1,030,687,031.  From  the  returns 
published  by  the  Cooperative  Union  in  1902  it  appears 
that  334  cooperative  societies  in  Great  Britain  have  built 
37,267  houses  for  their  members,  at  a  cost  of  £8,127,- 
155.  "Of  these  houses  29,020  have  been  purchased  and 
are  now  owned  by  the  members,  and  8,247  remain  the 
property  of  the  societies,  and  are  rented  to  the  members 
who  occupy  them.  There  are  thousands  of  cases  where 
members  who,  in  their  wildest  dreams,  could  never  have 
hoped  to  own  their  own  house,  are  now  dwelling  in  their, 
own  property  through  the  help  given  to  them  by  co- 
operation." In  Germany  the  Raiffeisen  system  of  agri- 
cultural credit  has  been  adapted  to  the  needs  of  town 
dwellers  under  the  name  of  the  Schulze-Delitzsch  sys- 
tem. Under  this  system  of  cooperation  loans  were 
granted  to  town  dwellers  totaling  $600,000,000  in  1901, 
and  $1,000,000,000  in  1910. 

Of  as  great  importance  for  the  future  as  the  eco- 
nomic results  of  consumers'  cooperation  are  its  social 
results.  Not  the  least  important  of  these  social  results 
is  the  development  of  a  feeling  of  solidarity  and  a 
spirit  of  other-helpfulness.  Upon  the  inculcation  of  this 
spirit  as  a  supplement  to  and  a  corrective  of  an  ultra- 


CONSUMERS'  COOPERATION  169 

individualistic  self -aggrandizing  spirit,  rests  largely  the 
hope  of  lower  living  costs  for  the  future.  Under  twen- 
tieth century  social  and  economic  conditions  an  increas- 
ing number  of  activities  can  be  done  cheaply  and  ef- 
ficiently only  by  cooperative  action.  The  aggressively 
selfish  must  give  way  to  the  aggressively  social.  Another 
social  result  of  such  cooperative  activities  is  the  de- 
velopment of  capable  leaders  with  a  capacity  to  see  over 
the  clasp  of  their  pocketbooks  into  the  richer  returns 
of  public  service.  No  factor  of  greater  influence  for 
good  has  come  from  the  cooperative  movement  than 
the  development  from  the  ranks  of  leaders  of  sagacity 
and  social  honesty.  The  latent  powers  of  the  socially 
diffident,  faculties  otherwise  wasted  for  lack  of  outlook 
and  opportunity  for  expression,  the  choked-up  desires 
of  men  have,  through  cooperation,  become  a  social  asset 
of  wealth  inestimable. 

A  prerequisite  in  looking  about  for  means  for  extend- 
ing the  fields,  activities  and  results  of  consumers'  co- 
operation is  the  study  of  the  cause  of  failures.  One 
reason  for  the  failure  of  the  Grange  movement  was  no 
doubt  peculiar  to  that  movement,  and  that  is  the  want  of 
solidarity  in  class  feeling  among  American  farmers,  their 
ultra-individualistic  spirit  and  the  fact  that  they  look 
for  profits  in  the  increase  of  land  values  rather  than  in 
lower  production  costs  and  better  marketing  facilities. 
There  were  other  reasons  for  the  failure  of  the  Grange : 
the  want  of  wholesale  houses  from  which  their  retail 
stores  could  obtain  their  supplies;  the  development  of 
the  five-and-ten-cent  store ;  the  department  store  and  the 
mail-order  houses ;  the  limited  capital  available  to  the 
Grange,  and  the  astounding  growth  of  the  movement  be- 
fore leaders  of  business  sagacity  and  knowledge  could 
be  developed. 

The  more  general  reasons  for  cooperative  failures  have 


170  LOWER  LIVING  COSTS  IN  CITIES 

been  summarized  by  Dr.  Ford,  in  his  "Cooperation  in 
New  England,"  as :  "Bad  management,  extended  credit, 
dishonesty,  ignorance  of  business,  small  capital,  and, 
most  of  all,  ignorance  and  disloyalty  of  members."  He 
then  goes  on  to  say  that  "close  examination  shows  that 
these  causes  may  be  reduced  to  two,  of  which  all  others 
are  but  phases — bad  management  and  lack  of  coopera- 
tion." 

Constructive  and  remedial  measures  for  extending  the 
work  and  results  of  consumers'  cooperation  may,  there- 
fore, be  grouped  about  the  two  heads — securing  bet- 
ter management  and  developing  a  better  cooperative 
spirit. 

The  basic  errors  in  management,  such  as  ill-chosen  lo- 
cation, ill-composed  membership,  tactless,  dishonest,  self- 
centered  business  methods,  are  to  be  overcome  primarily 
by  the  development  of  cooperative  literature  and  high 
cooperative  standards,  disseminated  and  enforced  by  pow- 
erful federations  of  all  consumers'  societies.  A  second 
means  for  securing  better  management  is  the  establish- 
ment of  schools  by  cooperative  societies  in  which  their 
managers  and  employees  may  be  trained  in  high-class 
business  methods.  Cooperation  will  find,  especially  in  the 
universities  offering  high-grade  commercial,  financial, 
business  and  economic  courses,  a  field  of  no  little  power 
in  securing  the  training  essential  to  business  success.  And 
finally,  state  and  national  governments  can  send  out  spe- 
cialists to  give  instruction,  to  supervise  accounts,  to  give 
advice  as  to  proper  methods  and  means  for  securing 
results. 

To  secure  a  higher  spirit  of  cooperation  is  indeed  as 
difficult  a  task  as  to  secure  a  higher  grade  of  business 
management.  Our  individualistic  nineteenth  century 
point  of  view  must  be  reshaped  to  include  a  larger  por- 
tion of  community  and  group  action.  This  can  be  and 


CONSUMERS'  COOPERATION  171 

is  being  furthered  by  the  publishing  of  cooperative  jour- 
nals and  literature. 

A  more  direct  and  powerful  means  for  developing  a 
truly  cooperative  spirit,  however,  is  the  federation  of  all 
cooperative  concerns  in  a  central  organization.  This 
federated  organization  can  then  do  away  with  the  nu- 
merous disadvantages  that  necessarily  come  to  the  iso- 
lated cooperative  concern;  it  can  give  the  protection, 
offensive  and  defensive,  that  every  such  new  concern 
must  have  to  succeed,  for  the  greater  its  success,  the 
greater  the  opposition  it  will  meet.  It  can, ,  moreover, 
take  the  offense,  and,  by  publicity,  reveal  to  a  sympathetic 
public  the  untoward  measures  being  taken  to  undermine 
the  success  of  such  cooperative  concerns. 

A  type  of  such  a  federation  already  exists  in  the  Brit- 
ish Cooperative  Union.  The  scope  of  the  Union's  activi- 
ties is  indicated  by  the  appended  lists  of  its  committees 
and  their  functions.1  By  maintaining  an  information 
bureau,  with  data  as  to  methods,  laws  and  accounting 
systems,  by  providing  correspondence  and  other  courses 
of  study  for  the  training  of  employees  and  managers,  by 

1"(i)  Office  Committee,  Executive;  (2)  Finance  Sub-com- 
mittee, to  check  accounts  and  control  expenditure;  (3)  Educa- 
tional Committee,  to  promote  classes  in  the  sciences,  in  book- 
keeping, in  cooperation,  and  to  provide  lecturers,  scholarships 
and  diplomas;  (4)  Productive  Committee,  to  advise  and  aid 
productive  associations;  (5)  Parliamentary  Committee,  to  watch 
legislation  and  protect  cooperative  interests  in  Parliament;  (6) 
Committee  of  Trade-Unionists  and  Cooperators,  to  settle  dis- 
putes and  maintain  cordial  relations  between  the  cooperative 
and  trade  union  movements;  (7)  Exhibitions  Committee,  to  or- 
ganize and  control  exhibitions  of  cooperative  activities ;  (8)  Prop- 
aganda Committee,  to  help  in  the  establishment  of  new  societies 
or  branches  of  existing  stores  and  to  aid  struggling  associations 
with  advice  and  loans;  (9)  International  Cooperative  Alliance, 
to  attend  foreign  cooperative  congresses,  and  report  on  foreign 
methods." — Ford:  "Cooperation  in  New  England,"  p.  9. 


172  LOWER  LIVING  COSTS  IN  CITIES 

giving  competitive  examinations  for  promotions,  by  pub- 
lishing a  journal,  by  having  a  responsible,  efficient  spokes- 
man for  the  entire  cooperative  movement,  by  offensive 
and  defensive  protection,  this  central  union  has  power  of 
no  small  significance. 

The  Right  Relationship  League  is  already  endeavoring 
to  perform  in  this  country  corresponding  functions  for 
cooperative  stores.  This  league,  which  in  1906  super- 
vised but  six  stores,  in  1912  had  organized  and  furthered 
the  work  of  150  stores  in  seven  states.  These  stores 
have  a  membership  of  about  10,000  and  an  annual  busi- 
ness of  about  $5,000,000.  The  work  of  this  league  con- 
sists in  persuading  people  that  cooperation  is  sound  and 
profitable,  and  in  helping  to  organize  and  manage  such 
stores. 

With  these  steps  to  secure  better  management  and  to 
inculcate  a  spirit  of  true  loyalty,  cooperative  societies 
and  activities  of  various  kinds  are  certain  to  multiply 
throughout  the  United  States. 

Cooperative  associations  will  thus  become  an  ever 
more  potent  factor  in  better  living  at  lower  costs. 


CHAPTER   XIII 
A   CITY  PROGRAM   FOR  LOWER  FOOD   COSTS 

Existing  food  distributing  agencies  have  evolved  as 
private  profit  dictated.  No  united  civic  action,  no  com- 
munity program  has  even  attempted  to  correlate  them 
into  a  unified,  efficient  whole.  The  melding  of  these 
private  agencies  into  a  working  unit  is  a  prime  essential 
to  the  elimination  of  needless  duplication  and  waste. 
This  is,  therefore,  the  basic  part  of  a  constructive  city 
program  for  minimum  living  costs. 

The  weakest  point  in  our  national  transportation  sys- 
tem is  the  lack  of  a  proper  coordination  of  water  and 
steam  routes.  Our  waterways  are  important,  not  only 
as  competitors  for  rail  lines  in  securing  lower  rates  and 
better  service,  but  also  in  order  to  keep  open  to  our  city 
markets  the  agricultural  and  producing  sections  more 
readily  accessible  to  water  routes.  Our  national  govern- 
ment has  spent  millions  in  the  development  of  water 
channels.  But  channels  alone  do  not  mean  that  boats 
are  plying  upon  them.  Of  as  great  importance  as  the 
channel  itself  are  adequate  water  terminal  facilities.  But 
our  water  terminals  are  inadequate,  our  harbors  ineffec- 
tively organized.  For  greater  national  efficiency  and  for 
lower  distribution  costs,  civic  attention  must  be  focused 
more  and  more  upon  cheap,  efficient  water  terminal  fa- 
cilities, free  from  the  domination  of  interested  and  com- 
peting concerns. 

There  are  indications  in  several  cities  that  control 
over  water  facilities  is  increasing.  Since  1910  a  number 

173 


174  LOWER  LIVING  COSTS  IN  CITIES 

of  cities,  such  as  New  York  and  Trenton,  have  increased 
their  control  and  ownership  over  their  frontage.  Much 
yet  remains  to  be  done,  however,  to  give  our  big  distri- 
bution centers  with  water  terminals  free,  well  correlated 
and  efficient  distributing  systems.  For  any  inefficiency, 
waste  or  duplication  in  these  systems,  the  consumer  pays 
in  higher  prices. 

Of  as  vital  importance  as  control  of  water  frontage 
is  the  way  this  frontage  is  equipped,  supervised  and  con- 
trolled. Terminal  efficiency  determines  the  efficiency  of 
the  carrier.  Terminals  must  be  equipped  with  wharves. 
Water-front  warehouses,  at  present  inadequate  save  at 
a  few  important  ports,  and  cold  storage  facilities,  are 
likewise  essential  in  order  that  outgoing  local  freight  may 
be  assembled  in  quantities  sufficient  for  cargo  loads,  and 
that  incoming  freight  may  be  assorted  for  local  distribu- 
tion. For  the  transshipment  of  freight  between  rail 
and  water  lines,  transshipping  machinery  and  appliances 
are  essential.  These,  as  a  rule,  are  wholly  inadequate 
in  American  cities.1  Such  transshipping  machinery  and 
appliances  are  characteristic  of  German  cities.  Dr. 
Howe,  in  his  recent  book  on  "European  Cities  at  Work," 
says  of  German  harbors:  "The  harbor  and  the  docks 
are  owned  by  the  city  and  are  equipped  with  railway 
tracks,  warehouses  and  wharves  to  facilitate  the  han- 
dling of  vast  quantities  of  freight  in  the  most  economic 
and  speedy  way  possible.  This  is  characteristic  of  Ger- 

*To  be  sure,  there  has  been  in  the  United  States  an  increased 
interest  in  municipal  ownership  of  docks,  wharves  and  land- 
ings. The  value  of  municipal  docks,  wharves  and  landings  in- 
creased from  eighty-four  million  ($83,857,499)  in  1906  to  one 
hundred  and  twenty-four  million  ($123,826,580)  in  1910,  while 
receipts  increased  from  four  million  ($3,832,840)  to  six  million 
($5,901,488),  the  payments  for  expenses  being  but  $2,156,696  and 
$2,952,151  respectively.  But  these  totals  represent  activity  on  the 
part  of  but  few  cities. 


A  CITY  PROGRAM  FOR  LOWER  FOOD  COSTS     175 

man  harbors.  The  docks  and  warehouses  and  machinery 
for  transshipping  freight  from  vessel  to  vessel,  or  from 
water  to  land,  are  all  under  public  control  and  are  oper- 
ated as  a  unit" 

To  assure  terminal  efficiency,  the  Director  of  Wharves 
and  Docks  must  be  an  official  of  wide,  clear  vision,  giving 
favors  to  none,  and  facilities  and  reasonable  rates  to  all. 
This  supervision,  the  regulations  as  to  landing,  the  pre- 
vention of  discrimination  among  rail  and  water,  or  steam 
and  gasoline,  or  through  and  local  boats,  are  all  vital 
factors  in  a  well  coordinated  urban  distributing  center. 

Many  German  cities  could  be  cited  as  examples  of 
just  such  distributing  centers.  Thus  Hamburg,  with 
fewer  natural  advantages  than  Boston,  New  York,  and 
many  other  seaport  towns  in  America,  has  developed  its 
opportunities  until  it  has  become  the  greatest  seaport  on 
the  continent  of  Europe.  The  wharves  and  docks  of  the 
city  are  municipally  owned,  and  every  possible  means 
utilized  for  the  economic  and  speedy  handling  of  vast 
quantities  of  freight. 

For  the  coordination,  not  only  of  water  and  rail  trans- 
portation agencies,  but  also  of  all  local  industries,  fac- 
tories, and  distributing  houses,  there  is  needed  a  city- 
owned  and  controlled  belt  line  railroad.  In  1910  but 
seven  American  cities  had  anything  approaching  a  gen- 
eral belt  railroad  and  the  trackage  in  these  seven  ports 
totaled  but  twenty-nine  miles,  serving  directly  about  fifty 
wharves. 

New  Orleans  is  one  of  the  ports  with  such  a  belt  line. 
The  Public  Belt  Railroad  Commission  was  created  in 
that  city  in  1904.  Work  on  the  belt  line  was  begun  in 
1905.  By  1910  about  ten  miles  of  track  had  been  com- 
pleted, connecting  the  water  front  and  railroads  with  all 
the  principal  industries.  This  line,  together  with  the 
great  extent  of  public  ownership  of  water  fronts  and 


176  LOWER  LIVING  COSTS  IN  CITIES 

wharves,  gives  to  the  Crescent  City  "the  most  perfect 
terminal  coordination  in  this  country." 

"To  make  it  impossible  for  any  individual  or  corpora- 
tion to  monopolize  railway  access  to  the  water  front," 
the  Philadelphia  Belt  Line  Railroad  Company  was  or- 
ganized in  1889.  "On  April  2,  1913,"  writes  the  presi- 
dent of  this  company,  "the  belt  line  operated  about  six 
miles  of  track  on  the  Delaware  River  front,  on  which 
it  handles  cars  for  the  Philadelphia  &  Reading  Railway 
Company  and  the  Baltimore  &  Ohio  Railroad  Com- 
pany." This  is  but  one-third  of  the  mileage  provided  for 
by  the  franchise.  Two  months  after  this  statement  was 
written  the  city  happily  completed  negotiations  looking 
toward  the  extension  and  greater  use  of  this  line.  It 
will  now  be  possible  for  Philadelphia  to  follow  out  the 
more  modern  city  plans  worked  out  in  German  cities. 
An  industrial  freight  railway  has  also  been  suggested  for 
the  Borough  of  the  Bronx  in  New  York  City.  This 
line  is  to  circumnavigate  the  borough  along  the  water's 
edge,  and  connect  the  railroads  coming  into  the  Bronx 
with  the  docks  and  factories.  A  freight  car  can  then 
be  transferred  from  one  railroad  line  to  another,  or  to 
any  steamship,  or  to  any  warehouse  or  receiving  center. 
In  Germany,  the  terminals  and  railway  connections 
are  built  with  switches,  sidings  and  spurs,  which  are 
linked  up  with  the  canals  and  waterways,  to  insure  the 
economical  handling  of  freight.  The  savings,  econ- 
omies and  facilities  in  food  distribution  through  such 
belt  lines  are  and  will  increasingly  be  of  great  im- 
portance. 

The  coordination  of  the  agencies  by  which  food  is 
brought  to  the  city  from  every  land  and  from  every 
part  of  our  own  nation  is  highly  important  to  the  welfare 
of  urban  and  rural  dweller  alike ;  of  like  value  is  the 
coordination  of  all  the  agencies  used  in  getting  country 


A  CITY  PROGRAM  FOR  LOWER  FOOD  COSTS     177 

produce  from,  and  urban  products  out  to,  the  surround- 
ing agricultural  community. 

In  the  large  cities  great  railroad  terminals  crowd  the 
local  traffic  out  into  the  less  profitable  centers.  Good 
organization  will  give  to  small  truck  boats  and  to  freight 
and  trolley  cars  loaded  in  the  surrounding  country  ready 
and  facile  access  to  the  city's  market  center.  In  cities 
with  good  urban  trolley  lines,  trolley  terminals  could  be 
placed  at  all  the  leading  market  sections  of  the  city,  thus 
encouraging  small  truck  shipments.  Just  this  sort  of  a 
terminal  has  been  planned  by  Pittsburgh,  to  which  pro- 
duce may  be  brought  by  truck  boat  and  trolley  car  alike. 
Good  direct  roads  render  tributary  to  such  centers  the 
farming  country  tapped  by  wagon  and  motor  truck. 

The  coordination  of  food  distributing  agencies  requires 
a  city  planned  for  social  needs.  City  planning,  the  sec- 
ond element  in  a  constructive  city  program  for  lower 
living  costs,  means  that,  to  live  well  and  happily,  there 
must  be  cooperative  effort  and  cooperative  spending,  and 
this  for  no  other  reason  than  because  we  are  now  living 
in  masses  and  not,  as  in  the  nineteenth  century,  on  iso- 
lated farms.  City  planning  protects  against  the  waste  of 
an  uncoordinated  distributing  system  paid  for  many  times 
over  from  the  small  but  never  ceasing  contributions  of 
every  purchaser  in  the  land.  A  proper  city  plan 
devises  transportation  facilities  that  decentralize  cities, 
thereby  making  living  more  wholesome,  and  that  cen- 
tralize business,  thereby  making  living  costs  less.  In  a 
city  planned  for  minimum  distribution  costs:  (i)  the 
main  depots  will  be  so  located  as  to  be  efficiently  related 
to  rail  and  water  lines;  (2)  steam  and  rail  lines  will  be 
coordinated  by  publicly  owned  and  controlled  water  ter- 
minal facilities  in  a  harbor  efficiently  organized;  (3) 
like  attention  will  be  given  to  good  through  roads,  to 
local  water  routes  and  to  trolley  lines,  that  local  freight 


178  LOWER  LIVING  COSTS  IN  CITIES 

may  be  sent  to  the  section  of  the  city  where  it  is  wanted ; 

(4)  a  public  belt  line  railway,  if  needed,  will  coordinate 
transporting,  manufacturing  and  distributing  agencies; 

(5)  the  main  centers  of  distribution  will  be  connected 
by  a  convenient  and  orderly  location  of  streets.     Lower 
food  costs,  higher  wages,  better  standards,  better  citizens, 
await  an  efficient  coordination  of  transportation  and  dis- 
tribution facilities,  await  a  city  planned  to  live  in,  not 
merely  to  work  in. 

Each  city,  state  and  nation  has  its  own  problem  in  se- 
curing an  efficient,  well  coordinated  distribution  system. 
The  problem  is  such  as  to  demand  careful  study.  The 
defects  in  the  present  system  of  distribution  can  best 
be  eradicated  by  wise  publicity  as  to  wholesale  and 
retail  conditions.  This  study  and  this  publicity  can 
best  be  made  through  national,  state  and  city  market 
bureaus.  The  distribution  problems  peculiar  to  each 
city,  each  state,  and  the  nation  can  then  be  studied  by 
specialists,  and  a  more  efficient  and  less  costly  system 
of  distribution  can  slowly  be  worked  out  that  will  mean 
lower  costs  to  the  farmer,  the  manufacturer,  the  pro- 
ducer everywhere,  and  lower  living  costs  to  all.  Through 
these  market  bureaus  the  producer  and  the  consumer, 
whether  individually  or  through  cooperative  associations, 
can  be  brought  ever  more  closely  together.  Through 
such  market  bureaus,  needless  costs  may  be  eliminated, 
and  the  information  secured  essential  to  sane,  construc- 
tive action  toward  lowering  living  costs.  The  establish- 
ment of  such  market  bureaus  is  the  third  big  element  in 
an  adequate  city  program  for  minimum  food  costs. 

The  farmer  wants  all  he  can  get  for  his  products. 
The  consumer  wants  all  the  produce  he  can  get  for  the 
least  money.  A  city  market  bureau  can  very  definitely 
further  the  interests  of  both  the  farmer  and  the  consumer 
and  thus  administer  to  the  needs  of  nine  out  of  every 


A  CITY  PROGRAM  FOR  LOWER  FOOD  COSTS    179 

ten  of  our  population.  When  the  farmer  in  the  country 
comes  to  study  the  marketing  problem,  he  will  learn  that 
he  is  practically  helpless  on  account  of  distance.  None 
of  his  questions  can  he  answer;  none  of  his  measures 
can  be  adopted  within  the  city.  European  countries  and 
cities  have  thought  it  wise  to  make  it  possible  for  the 
farmer  to  get  public  moneys  in  order  to  buy  lands.  Euro- 
pean countries  have  lent  definite  assistance  through  farm- 
ers' cooperative  societies  and  individual  farmers  as  well. 
The  American  city,  quite  in  contrast  to  these,  has  done 
nothing. 

The  question  as  to  what  a  municipal  market  bureau 
can  do  can  be  answered  in  large  part  by  reference  to  the 
author's  letter  files.  One  man  writes  from  Illinois  that 
he  would  like  to  market  butter  by  way  of  the  parcels 
post,  and  wants  assistance  for  finding  consumers  in  Phila- 
delphia. Another  farmer  wishes  to  learn  of  a  good  mar- 
ket stall  where  he  can  sell  his  goods  most  advantageously 
to  consumers.  Another  would  like  to  be  recommended  to 
a  reliable  wholesale  dealer  or  jobber.  Still  another  feels 
he  can  by  the  hamper  method  get  in  direct  touch  with 
many  consumers  if  he  can  but  get  a  list  of  interested 
city  dwellers.  Another  writes  that  his  freight  rates  are 
exorbitant  and  unfair.  Still  another  holds  that  the 
freighting  facilities  offered  at  his  station  are  wholly  in- 
adequate. Another  finds  need  for  the  completion  of  a 
certain  street  within  the  city,  in  order  to  have  a  thor- 
oughfare from  country  to  city.  One  farmers'  coopera- 
tive association  asks  whether  or  not  facilities  could  be 
made  so  that  one  of  their  boats  could  leave  the  New 
Jersey  shore  and  find  ample  marketing  facilities  in  Phila- 
delphia. These  are  but  types  of  the  questions  that  have 
come  to  the  author's  own  desk,  which  a  city  farm  bureau, 
and  a  city  farm  bureau  only,  with  thoroughgoing  in- 
formation, could  properly  and  adequately  answer.  The 


i8o  LOWER  LIVING  COSTS  IN  CITIES 

county  agents,  producers'  cooperative  societies,  farmers 
themselves,  are  relatively  helpless,  after  all,  when  it 
comes  to  finding  newer  and  better  channels  for  market- 
ing produce. 

The  consumer,  likewise,  has  no  means  of  knowing 
what  the  farmers  are  doing  and  what  the  farmers 
would  like  to  do.  No  retail  bulletins  are  issued  in  this 
country,  as  in  European  countries,  stating  to  farmers 
what  retail  prices  are.  Farmers  have  scant  informa- 
tion as  to  what  consumers  are  paying  for  their  pro- 
duce, and  consumers  have  not  the  slightest  notion  as 
to  what  farmers  are  receiving  for  their  goods.  Such 
a  market  bureau  could  stimulate  the  formation  of 
farm  bureaus  in  outlying  counties,  could  render  as- 
sistance to  farmers  in  sorting  and  packing  their  goods 
so  as  to  fit  them  to  the  particular  needs  of  their  own 
market. 

Such  a  market  bureau  could  assist  wholesalers,  jobbers 
and  retailers  to  get  the  facilities  and  services  needed  for 
an  efficient  prosecution  of  their  business.  Retailers  can 
be  informed  of  market  conditions  and  farmers'  prices. 
During  the  spring  of  1914,  the  Wharton  School  of  the 
University  of  Pennsylvania  and  the  Department  of  Pub- 
lic Works  in  the  City  of  Philadelphia  joined  in  a  Retail 
Merchants'  Week,  for  the  assistance  primarily  of  the 
small  outlying  retailer.  The  way  to  city  efficiency  lies 
through  business  efficiency,  and  constructive  assistance  to 
business  men,  which  a  live  urban  market  bureau  could 
render. 

Our  cities  have  been  expecting  their  residents  to  "grow 
up  on  the  range,"  as  it  were.  They  have  done  little  to 
assure  proper  foods  at  minimum  costs.  It  is  hoped  that 
the  above  pages  have  pointed  out  that  there  is  much  for 
the  city  to  do.  The  growing  of  social  consciousness  gives 
fair  promise  that  collective  action  will  soon  supplant  the 


A  CITY  PROGRAM  FOR  LOWER  FOOD  COSTS    181 

waste  and  inadequacy  of  the  present  facilities  for  food 
distribution  with  constructive  measures  that  will  mold 
existing  facilities  into  a  more  efficient  whole  and  will 
assure  minimum  food  costs  to  the  future  urban  earner. 


PART  III 
OTHER  URBAN  LIVING  COSTS 

CHAPTER  XIV 

PRODUCTIVITY   THROUGH   HEALTH   CONSERVA- 
TION 

Preventable  ill-health  and  disease  cost  the  people  of 
the  United  States  the  enormous  total  of  over  two  billion 
dollars  per  year. 

On  the  basis  used  by  Professor  Fisher,  in  his  "Report 
on  National  Vitality"  (p.  119),  the  unnecessary  loss  of 
capitalized  net  earnings  in  our  present  population  of  92,- 
000,000,  with  its  693,000  preventable  and  postponable 
deaths  per  year,  is  $i,i8o,ooo,ooo.1 

If  the  loss  per  preventable  or  postponable  death  be 
estimated  at  around  $2,000 — the  amount  fixed  by  the  In- 
ternational Congress  in  1907  was  $3,820 — the  total  loss 
in  capitalized  net  earnings  is  considerably  over  one  and 
a  half  billion  dollars.  An  annual  loss,  therefore,  to  the 

1  Prof.  Fisher  estimated  that  the  national  annual  unneces- 
sary loss  of  capitalized  net  earnings  due  to  deaths,  postponable 
or  preventable,  in  1907,  was  one  billion  dollars.  This  total  sum 
was  based  on  a  death  rate  of  18  per  1,000,  in  an  estimated  popu- 
lation for  1907  of  85,500,000,  an  annual  death  rate,  that  is,  of 
1,500,000  per  year.  Of  these  1,500,000  deaths,  42  per  cent.,  or 
630,000,  were  preventable  or  postponable.  Since  the  postpone- 
ment of  the  death  saves  on  the  average  $1,700  in  capitalized  net 
earnings,  the  annual  national,  unnecessary  loss  was  630,000 
times  1,700  or  $1,071,000,000. 
182 


PRODUCTIVITY  183 

social  income,  due  to  deaths  postponable  or  preventable, 
of  one  and  one-quarter  billion  dollars  is  a  conservative 
estimate.  The  minimum  annual  loss  of  earnings  due  to 
preventable  sickness  is  now  probably  over  $550,000,000 
per  annum.1 

Probably  $700,000,000  is  a  conservative  estimate  of 
the  annual  loss  due  to  caring  for  the  sick  and  dying  in 
the  United  States.  Using  Professor  Fisher's  estimate 
that  the  total  bill  for  caring  for  illness  and  death  in  each 
family  is  $27  per  year,  our  total  annual  expenditure  for 
the  20,255,555  families  in  the  United  States,  for  caring 
for  illness  and  death,  is  over  $540,000,000  per  annum.2 
But  $27,  however,  is  the  minimum  expended  in  working- 
men's  families.  The  average  in  all  families  is  probably 

1  This  estimate,  by  Prof.  Fisher,  is  on  the  basis  that  there  are 
only  3,000,000  sick  people  in  the  United  States.  He  assumes, 
since  sickness  increases  with  senility,  that  only  one-third,  or 
1,000,000,  of  these  were  in  the  working  period  of  life.  Assum- 
ing that  the  annual  earnings  are  $700,  and  assuming  that  one- 
fourth  of  the  1,000,000  had  no  employment — a  maximum 
percentage  surely — the  total  loss  was  750,000  times  700,  or  $525,- 
000,000.  On  the  basis  of  a  population  of  92,000,000,  in  lieu  of 
Prof.  Fisher's  estimate  of  85,500,000  for  1907,  there  are  in  the 
United  States  to-day  3,250,000  sick  people,  of  whom  three- 
fourths  lose  work  at  $700  per  year,  making  a  total  annual  loss 
of  810,000  times  700,  or  $567,000,000.  According  to  "Occupational 
Diseases,"  Thompson,  p.  10  (1914),  the  First  National  Confer- 
ence on  Industrial  Diseases,  held  in  Chicago  in  1910,  adapting 
to  the  United  States  the  sickness  insurance  of  the  German  in- 
dustrial population,  sent  a  memorial  to  the  President  calling  for 
controlling  legislation  and  estimating  that  there  were  in  this 
country  in  1910  13,400,000  cases  of  sickness  among  the  33,500,000 
men,  women  and  children  engaged  in  gainful  occupations  in  the 
United  States,  representing  284,750,000  days  of  sickness  and  $366,- 
107,145  loss  in  wages. 

'Prof.  Fisher's  estimate  in  "National  Vitality,"  p.  119,  was 
based  on  17,000,000  families,  thus  giving  him  a  total  loss  of 
$460,000,000  per  year. 


184  LOWER  LIVING  COSTS  IN  CITIES 

twice  this  sum.1  On  this  basis  the  total  annual  cost  of 
caring  for  the  sick,  a  large  proportion  of  whose  sickness 
is  preventable,  and  of  caring  for  the  dying,  42  per  cent, 
of  which  is  annually  preventable,  or  postponable,  is 
nearly  $1,000,000,000.  Indeed,  if  the  cost  of  medical 
attendance  is  figured  at  $1.50  per  day,  the  minimum  an- 
nual loss  of  3,000,000  sick  people  is  $1,500,000,000.  If 
half  of  this  sum  is  due  to  preventable  illness  or  postpon- 
able deaths  the  annual  loss  is  around  $700,000,000  per 
year. 

The  total  amount  which  preventable  illness  and  post- 
ponable deaths  annually  costs  the  United  States  is, 
therefore,  made  up  of  the  following  items :  loss  in  capi- 
talized net  earnings,  $1,250,000,000;  loss  in  current  earn- 
ings, $550,000,000;  medical  attention  and  nursing, 
$700,000,000 — a  total  of  $2,500,000,000. 

Another  way  of  getting  at  our  national  loss  through 
ill-health  and  preventable  deaths  is  to  estimate  the  losses 
due  to  preventable  diseases.  While  not  all  these  can  be 
itemized  here,  a  sufficient  number  can,  to  show  that  the 
total  losses,  as  judged  by  these  estimates,  total  more  than 
the  two  and  a  half  billion  dollars  estimated  above.  The 
gross  loss  of  earnings  by  illness  and  of  potential  earn- 
ings cut  off  by  death  due  to  tuberculosis  is  over  one  bil- 
lion dollars  annually,  $440,000,000  of  which  is  loss  to 
others  than  the  sick.2  The  monetary  loss  due  to  diseases 
carried  or  given  by  insects  is  $200,000,000  annually,  half 

1  The  average  annual  expenditure  for  medicine  and  doctor  in 
35  families  (14  Fall  River  cotton  mill  families  and  21  Southern 
cotton  mill  families)  was  $31. — "Report  on  Condition  of  Woman 
and  Child  Wage-Earners  in  the  United  States,"  Vol.  XVI,  pp. 
37-127,  188-227. 

*  In  New  York  State  alone  the  loss  due  to  deaths  from  tuber- 
culosis, the  cause  of  one-ninth  of  the  deaths  in  the  state,  was 
$64,000,000.  (This  was  based  on  the  average  money  loss  per 
death  of  $3,828,  the  sum  fixed  by  the  International  Congress  in 


PRODUCTIVITY  185 

of  which  is  to  be  accredited  to  malaria ;  the  monetary  loss 
due  to  the  yellow  fever  epidemic  of  1878  alone  was 
$100,000,000;  the  small-pox  epidemic  of  1871-72  in  Phil- 
adelphia caused  a  loss  of  $22,000,000.  The  hookworm 
disease  costs  South  Carolina  alone  $30,000,000  per  year, 
and  one-half  of  the  Southern  children  were  found  to 
have  this  disease.1 

The  disease  seems  to  be  very  prevalent  among  cotton 
mill  laborers  in  the  South,  where  hookworm-bearing 
laborers  are  worth  but  seventy-five  cents  per  day,  as  com- 
pared with  $1.50  earned  by  the  average  mill  laborer.2 
The  efficiency  of  the  worker  with  this  disease  is  not 
more  than  33  per  cent,  of  his  natural  efficiency. 

It  is  clearly  seen  that  if  such  is  the  loss  from  a  few 
of  the  major  preventable  diseases  the  totals  from  all  of 
the  preventable  diseases  and  postponable  deaths  will  eas- 
ily go  over  the  sum  estimated  above. 

But  the  loss  in  death  and  in  sickness  is  but  slight  com- 
pared with  the  loss  due  to  lowered  vitality  and  to  in- 
ertia. If  it  were  possible  to  translate  into  later  earning 
power  the  losses  in  ambition,  in  learning,  and  in  the 
grasp  of  all  that  the  schoolroom  or  playground  can  give, 
due  to  preventable  children's  diseases  and  ailments, 
the  total  would  mount  up  into  figures  quite  past  belief. 
Of  the  275,641  school  children  given  physical  examina- 

1907.)  Dr.  Allen,  in  "Civics  and  Health,"  p.  245,  says:  "The 
annual  cost  of  tuberculosis  to  New  York  City  is  established  at 
$23,000,000  and  to  the  United  States  at  $330,000,000." 

1  In  1004  some  90  out  of  every  too  of  the  working  population 
of  Porto  Rico  had  the  hook-worm  disease.  In  Colombia,  South 
America,  90  per  cent,  of  the  people  living  between  sea  level  and 
the  3,000  foot  level  were  suffering  from  this  same  affliction. 
Fifty  per  cent,  of  the  people  in  British  Guiana  and  not  less  than 
1,800,000  of  those  of  India,  while  in  Southern  China  three  out 
of  every  four  people,  are  sufferers  from  the  same  disease. 

2 Fisher:     "Report  on  National  Vitality,"  p.  122. 


186  LOWER  LIVING  COSTS  IN  CITIES 

tions  in  the  Borough  of  Manhattan  from  1905-1907,  15.8 
per  cent,  were  laboring  under  the  serious  handicap  im- 
posed by  obstructions  to  nasal  breathing,  16.9  per  cent, 
more  were  afflicted  with  posterior  nasal  growths,  while 
21.2  per  cent,  and  1.2  per  cent.,  respectively,  were  defec- 
tive in  vision  and  hearing.  Only  2.5  per  cent,  were 
found  to  be  defective  mentally.  A  decade  ago  almost 
all  of  these  children  found  to  be  physically  defective 
(55.1  per  cent.)  would  have  been  classed  as  mentally 
slow,  and  most  of  them  would  have  been  allowed  to 
become  backward  in  their  grades,  with  the  resultant  loss 
in  interest  and  in  educational  effectiveness  known  to  all 
educators. 

Nor  is  this  all.  The  break-up  of  families  and  the 
diminished  family  budgets  resulting  from  preventable 
illness  and  postponable  deaths  entail  heavy  drainage  on 
our  annual  social  income.  The  full  working  power 
of  every  individual  can  well  be  maintained  until  sixty 
years  of  age.  Making  this  standard  a  working  fact 
would  alone  vastly  increase  the  productivity  of  our 
cities. 

There  is  another  item  in  health  costs  of  deep  social 
significance,  and  that  is  the  vast  sum  of  money  spent  an- 
nually for  sick  and  life  insurance.  These  sums — in  so 
far  as  they  constitute  gambling  by  the  insured  as  to 
when  death  will  take  place,  and  to  that  extent  they  can- 
not be  counted  as  investments — can  certainly  be  dimin- 
ished. The  total  premium  income  of  the  256  life  insur- 
ance companies  in  the  United  States  was  for  1912  alone, 
$673,014,129,  an  increase  of  $266,067,532  over  1902, 
while  the  total  income  to  these  companies  for  that  same 
year  was  $893,391,717,  an  increase  of  $388,864,012  over 
I9O2.1  Into  the  72  mutual  accident  associations  in  the 
United  States  was  paid  in  1912  $6,419,331,  an  increase  of 

1  Insurance  Year  Book,  1913. 


PRODUCTIVITY  187 

$5,308,099  over  1901,  when  the  premiums  were  $1,111,- 
232. 

To  be  sure,  it  probably  would  not  be  sound  to  con- 
sider even  a  small  percentage  of  these  sums  as  losses, 
but  as  investments  they  can  certainly  be  made  more 
secure  while,  with  lowered  mortality,  rates  can  certainly 
be  lowered.  Life  insurance  rates  have  thus  far  not  been 
lowered  for  all  classes,  for  the  reason  that,  while  the 
general  death  rate  of  the  nation — indeed  of  the  world  as 
a  whole — has  been  lowered,  this  lower  death  rate  has 
been  essentially  among  infants  and  in  slums,  in  neither 
of  which  class  is  there  any  extensive  insurance.  But, 
when  preventive  medicine  and  community  action  lower 
the  mortality  rates  among  the  classes  that  do  insure, 
and  this  includes  a  large  percentage  of  working  people, 
there  can  and  should  be  definite  savings  in  the  rate  of 
insurance  paid. 

Now  the  significant  fact  about  the  diseases  causing 
the  greatest  loss  of  life  and  productive  power  is  that 
they  are  preventable.  Most  of  them,  indeed,  can  be 
stamped  out  in  their  entirety.  The  whole  attitude  toward 
health  conservation  and  governmental  functions  pertain- 
ing thereto  has  been  changed  by  the  discoveries  of  Pas- 
teur, von  Pettenkofer  and  Kock  that  germs  and  bacteria 
are  the  cause  of  disease.  Edward  Jenner's  discovery  in 
1798  of  a  vaccine  that  would  prevent  small-pox  has  made 
epidemics  of  that  disease  a  social  crime.  The  discovery 
of  an  antitoxin  for  diphtheria  in  1894  robbed  that  for- 
mer scourge  of  its  terrors.  Knowledge  of  the  source  of 
typhoid  fever  has  made  the  prevalence  of  that  disease, 
the  annual  loss  from  which  in  the  United  States  was 
formerly  $350,000,000,  an  evidence  of  criminal  neglect 
on  the  part  of  public  authorities  as  to  the  purity  of  the 
community's  water,  milk  and  food.  In  New  York  City 
the  death  rate  from  typhoid  was  but  12  per  100,000 


1 88 


LOWER  LIVING  COSTS  IN  CITIES 


population  in  1908;  in  Berlin,  it  was  but  3;  in  London. 
5 ;  in  Stockholm,  2.  Typhoid  fever  is  already  largely 
limited  to  rural  communities  where  sanitary  and  pre- 
cautionary measures  are  inadequate.1  Now  in  recent 
years  the  vaccine  for  typhoid,  less  harmful  in  its  effects, 
it  appears,  than  the  vaccine  for  small-pox,  promises  im- 
munity from  typhoid  for  a  period  of  at  least  two  or  three 
years. 

Philadelphia  reduced  her  death  rate  from  tuberculosis 
12  per  cent,  in  the  one  year,  1911-1912.  While  2,606 
Philadelphians  died  of  tuberculosis  in  1913,  the  number 
of  deaths  due  to  this  cause,  had  the  rate  of  1880  pre- 
vailed, would  have  been  5,890,  and  each  death  from 
tuberculosis  usually  means  more  than  a  year  of  invalidity. 
The  death  rate  from  pulmonary  tuberculosis  in  Munich 
was  2.3  in  1908,  as  compared  with  6.1  in  1871.  The 
most  important  factor  for  the  prevention  of  tuberculosis 
is  the  hospital  for  advanced  cases.  Better  dispensary 

1  Dr.  Whipple  in  his  book  on  Typhoid  Fever  cites  the  follow- 
ing table  showing  the  extent  to  which  typhoid  prevails  in  rural 
communities  as  distinct  from  the  average  death  rate  for  the 
entire  state. 

TYPHOID  A  RURAL  DISEASE 


Average 
Per  Cent, 
of  Rural 
Population 

Average  Ty- 
phoid Fever 
Death  Rate 
per  100,000 

Five  states  in  which  the  urban  population  was  more 

30 

25 

Six  states  in  which  the  urban  population  was  between 

49 

42 

Seven   states    in   which   the   urban    population   was 

67 

38 

Eight   states   in   which   the   urban   population   was 

75 

46 

Twelve  states  in  which  the  urban  population  was 

87 

62 

Twelve  states  in  which  the  urban  population  was 

95 

67 

Prepared  by  Dr.  John  S.  Fulton,  secretary  of  the  state  board  of  health, 
Maryland,  and  quoted  by  Dr.  George  C.  Whipple  in  Typhoid  Fever. — Allen; 
"Civics  and  Health,"  p.  13. 


PRODUCTIVITY  189 

facilities,  open-air  schools,  better  ventilated  homes  and 
workshops  and  general  elevation  of  the  standard  of 
living  are  all  uniting  to  stamp  out  this  scourge. 

The  discovery  that  insects  are  the  source  of  certain 
diseases,  such  as  malaria  and  yellow  fever,  is  making 
way  for  the  elimination  of  the  $200,000,000  loss  due  to 
insect  diseases.  The  hook-worm  disease,  with  its  heavy 
loss,  can  be  eradicated  at  a  cost  of  15  to  25  cents  per 
individual.  The  discovery  that  the  bubonic  plague  was 
due  to  the  rat  flea  has  made  it  possible  to  eliminate, 
in  its  entirety,  that  disease,  formerly  a  scourge  in  so 
many  communities.  In  Philadelphia  the  mortality  from 
pneumonia  was  reduced  19  per  cent,  in  1912  over 
1911. 

Enough  of  these  facts  have  been  cited  to  recall  effec- 
tively the  rapidity  with  which  our  communities  and  our 
cities  particularly  are  learning  to  handle  diseases  so  as 
to  prevent  their  heavy  toll  in  death  and  illness  and  inca- 
pacity. Indeed,  the  death  rate  is  already  more  than  one- 
third  lower  in  the  cities  where  sanitary  precautions  can 
and  have  been  enforced  than  it  is  in  the  country. 

After  the  laboratory  ferrets  out  the  bacteria  or  germs 
responsible  for  given  diseases,  and  finds  specific  cures 
therefor,  health  conservation  does  not  stop  with  the  iso- 
lation of  the  patient  and  the  adoption  of  precautionary 
measures  to  prevent  the  spread  of  the  disease.  The 
crushing  burden  of  insanity  can  be  materially  lightened. 
"Psychopathic  wards  and  clinics  for  the  observation  and 
treatment  of  persons  in  the  first  stages  of  mental  dis- 
turbances are  proving  effective  agencies  for  reducing  the 
number  of  those  who  would  otherwise  require  prolonged 
institutional  care." 1  The  foundation  principles  of 
health  and  conservation  are  making  the  transmission  of 

1  Article  by  Alexander  M.  Wilson,  Assistant  Director,  De- 
partment of  Public  Health  and  Charities,  Philadelphia. 


IQO  LOWER  LIVING  COSTS  IN  CITIES 

disease  impossible  through  adequate  sanitary  precautions 
for  the  shop  and  the  home.  The  enforcement  of  sanitary 
rules  has  made  dysentery,  scurvy  and  typhus  curiosities 
to  even  the  busiest  practicing  physician  of  the  day. 
School  inspection  is  reducing  the  spread  of  children's 
diseases.  Through  adequate  housing  regulations  and  in- 
spection, the  slum  is  no  longer  the  city's  culture  medium 
for  disease.  We  are  learning  the  relation  between  fa- 
tigue and  disease,  and  enlightened  employers  everywhere 
are  accepting  some  degree  of  moral  responsibility  for  the 
ill-health  and  lowered  vitality  of  their  employees  due  to 
overfatigue.  The  occupations  that  are  prolific  in  certain 
diseases  are  being  watched  with  increasing  vigilance  and 
acumen.  To  the  exploitation  of  children  in  labor  and 
the  enervation  of  women  through  work  ill  befitting  them, 
a  basic  cause  for  ill-health  and  premature  death,  society 
is  no  longer  wholly  indifferent.  Pure  food  legislation 
and  administration  are  rapidly  reducing  the  vast  amount 
of  gastric  and  intestinal  disorders.  Limitations  on  the 
sale  of  habit-forming  drugs  are  preventing  many  a  per- 
son from  putting  a  poison  into  his  mouth  that  would  steal 
away  his  brains  or  undermine  his  health.  Streets  are 
being  so  cleaned  as  no  longer  to  be  sources  for  the  spread 
of  disease.  Sewage  facilities  are  being  made  adequate 
and  garbage  is  being  disposed  of  in  such  a  way  as  no 
longer  to  endanger  the  health  of  our  cities.  We  are 
beginning  to  make  certain  that  the  streams  on  which  our 
cities  must  rely  for  drinking  water  shall  not  be  used 
with  impunity  as  free  sewage  channels  for  all  cities 
higher  up  the  stream;  no  longer  is  it  the  rule  that  the 
residents  of  one  city  must  drink  the  sewage  of  another. 
The  community  is  accepting  its  responsibility  for  the 
prevention  of  death  and  disease  among  infants.  Special 
care  of  the  milk  supply  and  facilities  for  saving  babies 
are  every  year  adding  millions  of  dollars  to  our  national 


PRODUCTIVITY  191 

health  through  the  lowering  of  infant  mortality.  In  five 
years  New  York  reduced  the  death  of  infants  under  one 
year  from  144  to  102  per  1,000. 

We  will  soon  be  in  a  position  where  definite  moral  and 
official  responsibility  can  be  placed  for  the  spread  and 
dissemination  of  each  and  every  transmissible  disease. 
This  means  that  the  heavy  losses  of  preventable  and 
postponable  illness  as  expressed  in  diminished  earning 
power,  incompetency  and  want  of  energy  are  to  be  things 
of  the  past ;  and  in  their  stead  will  be  substituted  an  effec- 
tive individual,  physically  wholesome,  bodily  and  men- 
tally, and  capable  of  adding  his  full  share  to  the  produc- 
tive power  of  his  city. 

Vital  statistics  are  the  barometers  by  which  cities  may 
gauge  the  intelligence  and  community  care  used  in  pro- 
tecting health  and  in  conserving  and  increasing  produc- 
tive power.  From  1891  to  1898  the  death  rate  decreased 
from  16.8  to  14.9  in  Sweden,  from  17.5  to  14.1  in  Nor- 
way, from  20.2  to  14.7  in  England  and  Wales,  from  22.6 
to  19.0  in  France,  from  20.7  to  16.1  in  Holland,  and  from 
23.4  to  18.0  in  Germany.  From  1880  to  1912  the  death 
rate  in  the  United  States  decreased  from  19.8  to  13.9. 
In  the  five-year  periods,  1891-1895  and  1905-1909,  the 
death  rate  in  the  leading  cities  of  the  world  declined 
from  20.5  to  15.4  in  Berlin,  from  18.8  to  14.4  in  London, 
from  21.2  to  17.7  in  Paris,  from  24.6  to  17.4  in  New 
York,  from  20.6  to  14.4  in  Chicago,  from  21.1  to  17.5  in 
Philadelphia,  from  23.6  to  18.7  in  Boston.  Social  losses 
through  preventable  causes  promise  soon  to  be  largely  a 
matter  of  history. 

But  the  big  fact  is  that  vitality  and  productive  power 
are  to  be  increased  largely  by  the  same  means  by  which 
unnecessary  deaths  are  prevented.  If  cities  are  to  have 
their  maximum  growth  and  prosperity,  their  first  and 
foremost  effort  must  be  to  see  that  every  citizen  is  a 


192  LOWER  LIVING  COSTS  IN  CITIES 

healthy,  vigorous  producer.  Herein  lies  the  most  hope- 
ful factor  in  a  constructive  urban  program. 

The  work  which  still  remains  to  be  done,  as  well  as  the 
avenues  through  which  it  is  to  be  done,  before  we  can 
claim  anything  like  an  adequately  constructive  health 
program  for  American  cities,  was  well  presented  in  the 
inaugural  address  by  Dr.  Victor  C.  Vaughan,  of  Michi- 
gan, at  the  meeting  of  the  American  Medical  Association, 
at  Atlantic  City,  in  1914.  Dr.  Vaughan  said: 

"In  so  great  a  work  as  the  eradication  of  preventable 
disease,  all  intelligent  people  must  cooperate.  The  law 
must  support  by  proper  enactments,  and  these  must  be 
enforced  with  justice  and  intelligence ;  it  must  recognize 
that  the  right  to  enjoy  health  is  quite  as  sacred  as  that 
to  possess  property ;  that  to  poison  men  in  factories  and 
mines,  to  pollute  drinking-water  supplies,  to  adulterate 
foods  and  to  drug  with  nostrums  is  manslaughter.  Re- 
ligion must  teach  the  sanctity  of  the  body  as  well  as 
that  of  the  soul,  that  ignorance  is  sin  and  knowledge 
virtue,  that  parenthood  is  the  holiest  function  performed 
by  man  and  that  to  transmit  disease  is  an  unpardonable 
sin.  The  teacher  must  know  hygiene  as  well  as  mathe- 
matics. The  capitalist  must  recognize  that  improvement 
in  health  and  growth  in  intelligence  increase  the  efficiency 
of  labor.  There  never  has  been  a  time  when  scientific 
medicine  has  had  so  many  and  such  efficient  and  appre- 
ciative helpers  as  it  has  to-day." 

The  means  and  agencies  by  which  health  can  be  prop- 
erly conserved,  the  working  life  prolonged,  and  vitality 
and  productive  power  increased  are:  (i)  active  depart- 
ments of  health  and  sanitation;  (2)  efficient  and  ade- 
quate public  sanitation;  (3)  medical  inspection  and  hy- 
giene in  the  schools;  (4)  special  protection  and  care  of 
infants;  (5)  pure  foods  and  drugs;  (6)  the  elimination 
of  undue  fatigue  at  school  and  in  the  shop;  (7)  the 


PRODUCTIVITY  193 

constructive  and  critical  work  of  voluntary  organiza- 
tions; (8)  wholesome  environmental  conditions,  including 
just  wages;  (9)  an  effective  housing  program;  (10)  ade- 
quate recreational  facilities. 

The  last  two  are  considered  in  special  chapters.  To 
the  consideration  of  each  of  the  others,  the  remaining 
pages  of  this  chapter  are  devoted. 


HEALTH  DEPARTMENTS 

Of  the  $17.34  per  capita,  paid  in  1912  by  each  resi- 
dent of  cities  in  the  United  States  of  over  30,00x3,  $1.77 
went  for  the  city's  expenses  for  health  conservation  and 
sanitation.  Somewhat  over  twice  this  amount  ($3.99  to 
be  exact)  was  paid  for  protection  to  person  and  prop- 
erty.1 

In  1912,  in  cities  of  over  30,000,  10.2  per  cent,  of  pay- 
ments for  the  city's  expenses,  other  than  for  public 
service  enterprises,  went  to  health  conservation  and  sani- 
tation costs,  as  compared  with  23  per  cent,  for  protection 
to  person  and  property.2 

"The  Cost  of  Municipal  Government  in  Massachu- 
setts," 1908,  shows  that  the  per  capita  expenditure  for 
both  health  conservation  and  sanitation  was  $1.59  for 
thirty-three  Massachusetts  cities  in  1906,  the  population 
of  which  varied  from  14,073  to  606,216.  According  to 

*In  1910  of  the  $16.45  Per  capita  paid  by  each  resident  of 
cities  in  the  United  States  of  over  30,000,  $1.62  went  for  the 
city's  expenses  for  health  conservation  and  sanitation,  while 
considerably  over  twice  this  amount  ($4.10  to  be  exact)  was 
paid  for  protection  to  person  and  property. 

2  In  1910,  9.9  per  cent,  of  payments  for  city  expenses  other 
than  public  service  enterprises  went  to  health  conservation  and 
sanitation  costs  as  compared  with  25  per  cent.  (24.9  per  cent,  to 
be  exact)  for  protection  to  person  and  property. 


MUD&  HFRSHEY 


194  LOWER  LIVING  COSTS  IN  CITIES 

the  census  report  in  1903  on  statistics  of  cities  having  a 
population  of  8,000  to  25,000  (the  latest  available  data), 
the  per  capita  expenditure  for  highways  and  sanitation 
was  $3.85,  as  compared  with  $1.53  for  fire  and  police 
departments. 

HEALTH  CONSERVATION 

Of  the  $1.77  paid  in  1912  for  health  conservation  and 
sanitation,  in  cities  of  over  30,000,  only  $0.35  went  for 
health  conservation  alone:  that  is,  $1.00  to  health  con- 
servation to  $4.00  to  sanitation.1  Six  times  as  much 
per  capita  went  to  the  police  department  ($2.04)  and 
five  times  as  much  to  the  fire  department  ($1.62)  as  to 
health  conservation  ($0.35 ).2 

In  the  thirty-three  cities  of  Massachusetts,3  9.01  per 
cent,  of  the  expenses  of  all  municipal  departments  went 
to  health  conservation  and  sanitation,  as  compared  with 
io.ii  per  cent,  to  the  police  department,  8.8 1  per  cent  to 
the  fire  department,  20.62  per  cent,  to  highways  and 
bridges,  and  6.10  per  cent,  to  charities  and  corrections.4 

The  percentage  of  expenditures  for  health  conserva- 
tion varies  in  the  different  cities  of  the  United  States 
from  0.19  per  cent,  in  cities  with  a  population  of  from 
30,000  to  50,000,  0.24  per  cent,  in  cities  having  a  popu- 
lation of  50,000  to  100,000,  0.29  per  cent,  for  cities  with 

*The  amounts  were:  health  conservation,  $10,351,594;  sanita- 
tion, $41,570,602. 

1  In  1912  the  per  capita  expenditures  for  other  purposes  were : 
highways,  $1.98;  charities,  hospitals  and  corrections,  $1.13; 
schools,  $5.01 ;  libraries,  $0.22 ;  recreation,  $0.64. 

*  As  shown  in  "The  Cost  of  Municipal  Government  in  Massa- 
chusetts," 1008,  p.  xlviii. 

4 The  percentages  of  the  other  departments  were:  education, 
28.06 ;  protection  to  life  and  property,  other  than  fire  and  police, 
1.8;  libraries  and  reading-rooms,  2.03;  recreation,  4.92;  soldiers' 
benefit  (estimated),  .94. 


PRODUCTIVITY  195 

a  population  of  100,000  to  300,000,  0.41  per  cent,  for 
cities  with  a  population  of  300,000  to  500,000,  to  0.44 
per  cent,  for  cities  with  a  population  of  over  500,000. 
The  percentage  paid  for  health  conservation  (1912) 
varies  for  each  of  the  cities  within  the  several  groups. 
Thus  Philadelphia  pays  0.33  per  cent. ;  New  York,  0.57 
per  cent. ;  Chicago,  0.24  per  cent ;  Milwaukee,  0.39  per 
cent.,  for  health  conservation.  Of  the  eleven  cities  of 
over  30,000  (1910)  that  spent  4  per  cent,  or  more  of 
their  total  expenses  for  health  conservation,  eight  were  in 
southern  states.1 

In  Massachusetts,2  Worcester,  with  a  population  of 
131,518,  paid  13.25  per  cent,  of  municipal  expenditures 
for  health  conservation,  as  compared  with  an  expenditure 
of  less  than  I  per  cent.  (0.94  per  cent.)  in  Northampton, 
with  a  population  of  20,310.  The  total  cost  for  health 

1  CITIES  OF  OVER  30,000  SPENDING  4  PER  CENT.  OR  MORE  OF  THEIR  TOTAL  EX- 
PENDITURES FOR  HEALTH  CONSERVATION.     (Average  for  U.  S.,  2.0.)* 

New  Orleans,  La 4.1  Mobile,  Ala 4.2 

Fall  River,  Mass 4 .  Augusta,  Ga 5.1 

Grand  Rapids,  Mich 5 .  o  Macon,  Ga 4.3 

Duluth,  Minn 4.0  Montgomery,  Ala 6.5 

Savannah,  Ga 4.9  Charlotte,  N.  C 4.0 

Oklahoma  City,  Okla 4.8 

Total  number  of  cities,  n;  southern  cities,  8. 

*  Financial  Statistics  of  Cities  Having  a  Population  of  Over  30,000:  1910, 
Table  28,  p.  228. 

The  maximum  and  minimum  amounts  spent  by  cities  in  each 
of  the  four  groups  for  1910  are  indicated  in  the  following  table: 

HEALTH  CONSERVATION — 'PER  CENT.  DISTRIBUTION  FOR  EXPENSES  OTHER  THAN 
OF  PUBLIC  SERVICE  ENTERPRISES,  1910 — CITIES  OVER  30,000.* 


Health  Conserv 
Average  of 
Group  i  .  . 

at  ion 
all  cities  

2.O 

['•' 

0.8 

.   0.5 
.   0.3 

.      20 

I.g 

Group  2  .  . 

21 

Group  4  .  . 

1.8 

Group  i  
Group  2  

Maximum 
New  Orleans,  La.  . 

Grand  Rapids,  Mic 

Savannah,  Ga  
Augusta,  Ga  

...   4.1 

b..   5.0 

...   4-9 
...   5-1 

Minimum 
Cincinnati,  O.  ._.... 
Minneapolis,  Minn.  . 
Bridgeport,  Conn... 

Group  3  
Group  4  

Pawtucket,  R.  I  
Quincy,  111  

*  Ibid. 

aln    accordance    with   the   report   on   the    Cost    of   Municipal 
Government  for  1906. 


196  LOWER  LIVING  COSTS  IN  CITIES 

conservation  in  all  the  cities  of  the  United  States  over 
30,000  in  1912  was  $10,351,594. 

The  items  included  in  health  conservation,  as  given 
in  the  above  statistics,  are  best  revealed  in  the  itemized 
expenditures  for  health  conservation  as  given  in  the 
Massachusetts  Report  for  1906.  In  the  33  cities  of  Mas- 
sachusetts, the  total  population  of  which  was  2,066,913, 
the  aggregate  amount  spent  for  health  conservation  (an 
average  of  30  cents  per  capita)  was  $618,929.87.  Of  this 
amount,  $256,923.84  went  to  general  expenses.1 

Urban  residents  and  public  officials  alike  are  grasping 
the  importance  of  efficiency  in  health  departments,  and 
recognizing  the  need  for  expenditures  commensurate  with 
the  results  that  it  is  possible  for  those  departments  to 
attain.  The  per  capita  expenditures  for  health  conser- 
vation in  cities  of  over  30,000  have  increased  from  21 
cents  in  1902  to  35  cents  in  1912,  an  increase  of  over 
50  per  cent,  in  ten  years.  During  this  same  period  the 
per  capita  expenditures  for  the  police  department  in- 
creased 10.8  per  cent. ;  for  the  fire  department,  24.6  per 
cent. ;  for  charities,  hospitals  and  corrections,  34.5  per 
cent.2 

The  only  definite  standard  that  can  be  set  for  the  maxi- 

1  General  Expenses ' $256,923.84 

City  Physician 6,584.59 

Inspection  of  School  Children 16,471.12 

Contagious  Diseases 72,940.29 

Hospitals i35,5i9-86 

Quarantine  and  Pest  Houses 53,227.94 

Morgue 9-95 

Inspection  Departments 49,210.69 

Miscellaneous 28,041.59 

Cost  of  Municipal  Government  in  Massachusetts,  1908,  p.  8. 
2 The  per  capita  increases  were:  police  department,  $1.84  in 
1902  to  $2.04  in  1912;  fire  department,  $1.30  in  1902  to  $1.62  in 
1912;  charities,  hospitals  and  corrections,  $.84  in  1902  to  $1.13 
in  1912.  The  following  increases  in  other  expenditures  are 
shown:  highways,  from  $1.69  in  1902  to  $1.98  in  1912;  schools, 
from  $3.61  in  1902  to  $5.01  in  1912;  recreation,  from  $.58  in 
1902  to  $.64  in  1912. 


PRODUCTIVITY  197 

mum  limit  of  expenditures  for  health  conservation  is 
that  they  should  be  adequate  to  produce  a  minimum  death 
rate.  The  death  rate  need  not  be  unduly  high  because 
the  city  is  large.  Neither  is  the  death  rate  necessarily 
higher  among  certain  races  or  nationalities.  The  amount 
of  expenditures  in  money  and  vigilance  will  vary  with 
such  factors  as  the  purity  of  the  milk  and  water  supply, 
the  adequacy  of  sewers  and  sewage  disposal,  the  occupa- 
tions generally  followed  in  the  town,  the  average  income 
of  the  poorer  classes,  the  extent  of  unemployment,  the 
sanitary  habits  and  standards  of  the  citizens,  and 
the  climatic  and  other  environmental  conditions. 
Within  limits,  the  city's  death  rate  is  a  purchasable 
commodity. 

This  increase  in  expenditures  for  health  conservation 
has  been  accompanied  by  a  radical  departure  from  the 
outworn  doctrine  that  government  must  confine  its  activi- 
ties solely  to  negative  and  preventive  measures.  Health 
officials  no  longer  confine  themselves  to  the  abatement  of 
nuisances  and  the  isolation  of  contagious  and  infectious 
diseases.  To  be  sure,  their  legal  powers  are  still  limited 
by  the  courts'  interpretation  of  the  extent  of  regulation 
and  prevention  allowable  under  the  police  power.  But 
public  opinion  is  upholding  health  officials  in  the 
extension  of  the  field  of  their  activities  from  negative 
to  constructive  measures,  and  this  public  opinion,  in  re- 
turn, is  reacting  to  get  a  more  favorable  interpretation 
of  the  police  power  from  the  courts.  Health  depart- 
ments are  issuing  pamphlets  and  leaflets  and  through  the 
daily  newspapers  are  instructing  the  citizen,  rural  as  well 
as  urban,  as  to  the  habits  and  hygienic  measures  essen- 
tial to  vitality  and  productive  power.  Moreover,  these 
officials  are  beginning  to  accept  their  responsibility  for 
pointing  out  the  dangers  to  health  and  productive  power 
from  insanitary  housing,  unhygienic  factories,  overfa- 


ip8  LOWER  LIVING-  COSTS  IN  CITIES 

tigue  in  the  shop  and  food  contamination  in  the  market 
and  in  the  store. 

In  its  health  department  the  city  has  an  avenue  through 
which  the  productive  life  of  its  every  citizen  can  be 
prolonged  and  his  productive  power  increased.  The 
urban  citizen  must  look  for  his  insurance  to  an  ade- 
quately supported,  highly  efficient  health  department, 
shot  through  and  through  with  the  spirit  of  social  re- 
sponsibility. 

SANITATION 

Adequate  sanitation  is  another  agency  that  plays  a 
vital  part  in  the  productive  power  of  the  urban  citizen. 
No  longer  are  the  cleansing  of  streets,  the  removal  of 
garbage  and  other  sanitary  necessities  left  to  the  discre- 
tion of  urban  dwellers,  the  most  of  whom  are  from  rural 
communities  and  thus  naturally  tend  to  use  and  tolerate 
in  cities  the  sanitary  standards  and  usages  that  were 
adequate  in  the  country. 

If  any  reason  were  needed  for  the  city's  assuming 
complete  control  over  sanitation,  it  could  be  found  in 
the  unnecessarily  heavy  cost  for  individuals  to  care  for 
these  matters  separately.  The  result  is  that  city  ex- 
penditures for  sanitation  purposes  are  necessarily  in- 
creasing— increasing  because  the  area  and  the  population 
are  growing,  increasing  because  health  conservation  in 
crowded  areas  necessitates  larger  community  expendi- 
tures. Of  the  $17.34  per  capita  paid  in  1912  by  residents 
of  cities  of  over  30,000  for  the  expenses  of  the  general 
departments  of  their  city  government,  $1.42  went  for 
sanitation.  This  amount  in  1910  was  but  $1.29,  while 
in  1902  it  was  but  88  cents.  Cities  of  over  30,000  spent 
$41,570,602  for  sanitation  in  1912,  as  compared  with 
$35,271,283  in  1910,  and  $18,668,980  in  1902.  Of  all 


PRODUCTIVITY  199 

the  payments  in  cities  of  over  30,000  for  expenses  of 
their  general  departments  in  1912,  8.2  per  cent,  was  for 
sanitation.  The  per  capita  payment  for  sanitation  in 
thirty-three  cities  of  Massachusetts  was,  in  1906,  $1.30. 
Sanitation  expenses  are  necessarily  greater  in  the 
larger  cities.1  That  the  expenditure  varies,  however, 
within  the  various  groups  is  clearly  shown  in  the  follow- 
ing table,  which  gives  the  maximum  and  minimum  ex- 
penditures for  cities  in  each  of  the  four  groups. 

Maximum  Minimum 

GROUP  i — 

(Pop.  300,000  or  over)     New  Orleans  14 . 5    Los  Angeles   4 .  i 
GROUP  2 — 

(Pop.  100,000 — 300,000)  Atlanta          14.2    Denver  3.8 

GROUP  3 — 

(Pop.  50,000 — 100,000)   Jacksonville    20.7    Duluth  2.6 

GROUP  4 — 

(Pop.  30,000 — 50,000)     Tampa  18.0    Bay  City        2.5* 

*  Financial  Statistics  of  Cities  Having  a  Population  of  Over 
30,000:  1910,  p.  230. 

The  items  in  sanitation  expenditures  are  four:  street 
cleaning,  refuse  collection  and  disposal,  sewers  and 
sewage  disposal  and  general  expenditures.  Thus  of  the 
$35,271,283  spent  for  sanitation  in  cities  of  over  30,000 
in  1910,  $5,935,943  was  for  sewers  and  sewage  disposal, 
$20,243,228  was  for  street  cleaning,  and  $8,710,474  for 

1  PER  CENT.  SPENT  ON  SANITATION  IN  CITIES  OVER  30.000,  1910  AND  1912.* 

1910  1912 

Population          Per  Cent.  Population         Per  Cent. 

Group  i 300,000  or  over 7.9  Over  500,000 8.2 

Group  2 100,000 — 300,000 7.8  300,000 — 'Soo.ooo 7.5 

Groups 50,000 — 100,000 8.0  100,000 — 300,000 8.8 

Group  4 30,000 — 50,000 7.0  50,000 — 'ioo,ooo 8.4 

Group  5 30,000 — ^50,000 7.2 

Average  for  all  cities.     For  1910 7.9         For  1912 8.2 

*  Financial  Statistics  of  Cities  Having  a   Population  of  Over  30,000:  1910, 
p.  228. 

*Ibid:  1912,  p.  40. 


200  LOWER  LIVING  COSTS  IN  CITIES 

refuse  collection  and  disposal,  leaving  but  $381,638  for 
"all  other  expenditures."  In  the  thirty-three  cities  of 
Massachusetts  in  1906,  a  total  of  $2,676,703.57  ($1.30 
per  capita)  was  paid  for  sanitation  distributed  as  fol- 
lows :  sewer  operation  and  maintenance,  $793,223.36 ; 
house  connections,  $18,731.17;  refuse  and  garbage 
disposal,  $1,240,265.19;  metropolitan  sewer  tax,  $574,- 
191.90;  miscellaneous,  $5o,29i.95.1  Thus  minimum 
sanitation  costs,  commensurate  with  results  to  be 
attained  by  adequate  sanitation,  resolve  themselves 
into  proper  costs  for  street  cleaning,  for  sewers  and 
sewage  disposal  and  for  refuse  collection  and  dis- 
posal. 

In  every  one  of  these  fields  there  are  opportunities 
for  an  incceased  efficiency  that  secures  even  better  re- 
sults at  lower  prices.  Thus  much  of  the  work  of  sewage 
construction  has  been  let  out  to  private  contractors  at 
prices  far  above  what  the  city  could  do  the  identical 
work  for.  Street  cleaning,  formerly  and  still  too  largely 
let  out  to  favored  contractors,  is  now  becoming  a  science 
of  its  own  when  done  by  the  city.  For  the  collection 
and  disposal  of  refuse  the  cities  of  over  30,000  paid 
$8,700,000  in  1910  alone.  The  experience  of  Ger- 
man cities  and  recently  of  a  number  of  American  cities 
proves  conclusively  that  this  expenditure  is  wholly  un- 
justified. These  cities  have  demonstrated  that  garbage 
can  be  collected  and  disposed  of  at  a  profit  to  the 
city. 

Some  idea  of  the  amount  of  refuse  annually  collected 
in  a  city  can  be  gleaned  from  the  tables  cited  by  Mr.  H. 
deB.  Parsons  in  his  book  on  "Disposal  of  Municipal 
Refuse,"  published  in  1906,  which  show  that  New  York 
annually  collects  2,456,053  tons  of  2,000  pounds  each  of 

1  "Cost   of    Municipal    Government  in   Massachusetts,"    Public 
Document  79,  published  in   1908,  p.  9. 


PRODUCTIVITY  201 

refuse;  Buffalo,  190,022  tons;  Philadelphia,  834,- 
312;  Washington,  D.  C,  162,702;  Newark,  256,69s.1 
Mr.  William  A.  Venable  in  his  book,  published  in  1906, 
on  "Garbage  Crematories  in  America,"  gives  tables 
showing  that  the  refuse  collected  per  capita  per  annum 
for  each  of  four  large  American  cities  was :  1,670  pounds 
in  New  York,  1,480  pounds  in  Boston,  1,140  pounds 
in  Washington,  and  1,500  pounds  in  Baltimore.  He 
concludes  that  "the  amounts  per  capita  per  annum  in  the 
United  States  may  be  roughly  stated  to  range  as  follows : 
ashes,  300  to  1,200  pounds;  garbage,  100  to  180  pounds; 
rubbish,  50  to  100  pounds.2 

Now  all  of  this  garbage  and  refuse  material  is  a 
source  of  wealth;  it  has  heretofore  been  considered  a 
source  of  waste.  In  all  of  the  other  items  generally 
classed  as  sanitation  expenditures,  there  is  an  equal  op- 
portunity for  lowering  costs.  Measured  by  the  results 
now  being  secured,  there  seems  to  be  no  justification 
for  the  American  expenditures  on  sanitation. 


MEDICAL  INSPECTION  OF  SCHOOL  CHILDREN 

Another  agency  by  which  lower  vitality  and  unneces- 
sary deaths  may  be  prevented  and  physical  fitness  and 
vigor  increased  is  the  medical  inspection  of  school  chil- 
dren including  the  teaching  of  adequate  ideals  of  hygiene 
in  the  schoolroom.  To  be  sure,  much  has  already  been 
done  in  this  field,  but  much  more  can  be  done. 

*In  the  Borough  of  Manhattan,  which  is  all  built  over,  Mr. 
Parsons  shows  that  the  city  collects  per  day  an  average  of 
4.886  pounds  per  capita  as  compared  with  2.63  pounds  in  the 
Borough  of  the  Bronx,  2.66  in  Buffalo,  3.298  in  Philadelphia, 
2.92  in  Cincinnati,  3.05  in  Washington,  D.  C,  and  over  5  pounds 
in  Newark. 

a  Wm.  A.  Venable :    "Garbage  Crematories  in  America,"  p.  23. 


202  LOWER  LIVING  COSTS  IN  CITIES 

In  1890  one  city  in  the  United  States  had  a  sys- 
tem of  medical  inspection  for  its  school  children.1  In 
1907  in  cities  had  such  systems;  while  in  1911  the 
number  had  increased  to  411.  Ninety  per  cent,  of  the 
1,285  cities  in  the  United  States  having  organized  sys- 
tems of  graded  schools  recently  reported  to  the  Russell 
Sage  Foundation  as  to  the  extent  of  their  medical  in- 
spection. Of  this  90  per  cent,  but  43  per  cent,  re- 
ported regular  organized  systems  of  medical  inspection 
in  their  public  schools.  Thus,  while  much  has  been  done, 
the  fact  remains  that  57  per  cent,  of  our  cities  have  not 
undertaken  this  very  important  and  vital  work.  The 
forty-three  per  cent,  of  our  cities  that  already  have  regu- 
lar organized  systems  of  medical  inspection  employ  1415 
school  doctors  for  the  work.  But  in  only  214  of  the  443 
cities  reporting  systems  of  medical  inspection  do  the 
systems  include  a  complete  physical  examination  con- 
ducted by  doctors.2 

The  distinction  must  be  clearly  kept  in  mind  between : 
(i)  medical  inspection  of  school  children  for  communi- 
cable diseases,  (2)  the  examination  of  school  children 
for  physical  defects,  (3)  free  medical  treatment  at 
schools  or  at  special  dispensaries  for  school  children  and 
(4)  the  inculcation  of  the  foundation  principles  as  to 
hygiene.  These  four  divisions  would  include  a  number 
of  activities,  such  as  wholesome,  low-priced  lunches  at 
cost,  certainly  in  all  the  poorer  sections  of  the  city,  the 
creation  of  special  classes,  such  as  open-air  classes  for 
consumptives,  and  special  make-up  classes  for  pupils 

1  Bulletin   101   of   the   Department   of   Child   Hygiene  of  the 
Russell  Sage  Foundation  on  "What  American  Cities  Are  Doing 
for  the  Health  of  School  Children." 

2  In    106  of  the  443  cities   reporting   medical   inspection,   this 
inspection   was   administered   by  boards   of   health;   in  337  by 
boards   of   education. 


PRODUCTIVITY  203 

whose  school  work  has  been  retarded  by  corrected  physi- 
cal causes,  such  as  the  removal  of  adenoids.1  Such  in- 
clusive activities  as  these  will  ultimately  give  to  our 
cities  maximum  returns  in  productive  vitality  for  a 
minimum  outlay  at  the  source  of  physical  disorders  and 
ill-health.  "Medical  inspection  is  an  extension  of  the 
activities  of  the  school  in  which  the  educator  and  the 
physician  join  hands  to  insure  for  each  child  such  con- 
ditions of  health  and  vitality  as  will  best  enable  him  to 
take  full  advantage  of  the  free  education  offered  by  the 
state.  Its  object  is  to  assure  better  health  conditions 
among  school  children,  safeguard  them  from  disease,  and 
render  them  healthier,  happier,  and  more  vigorous.  It  is 
founded  on  a  recognition  of  the  intimate  relationship 
between  the  physical  and  mental  conditions  of  the  chil- 
dren, and  the  consequent  dependence  of  education  on 
health  conditions." 

The  spread  of  communicable  diseases  is  controlled  at 
its  source  through  medical  inspection  of  school  children 
followed  by  the  needed  precautionary  measures.  The 
"catching"  diseases,  such  as  measles,  chicken-pox, 

1  The  functions  of  New  York  City's  Department  of  Child  Hy- 
giene, established  in  1908,  include  "the  supervision  of  all  midwives 
practicing  in  the  city,  the  prevention  of  infant  mortality  by  the 
instruction  of  mothers  in  the  proper  care  of  babies,  the  super- 
vision of  day  nurseries,  foundling  asylums,  and  places  where 
children  are  boarded  out,  the  medical  inspection  and  physical 
examination  of  children  attending  public  schools,  and  the  en- 
forcement of  that  part  of  the  labor  law  which  relates  to  the 
issuing  of  employment  certificates  to  children  between  the  ages 
of  fourteen  and  sixteen."  The  commissioner  of  health  of  the 
city  now  recommends  the  extension  of  the  inspection  service 
to  all  free  schools,  the  control  of  contagious  diseases  in  the 
schools  by  nurses,  the  holding  of  school  consultations  with 
parents  by  medical  inspectors  to  reduce  the  amount  of  home 
visiting  by  the  nurses,  and  the  establishment  of  school  and 
dental  clinics.  Beard :  American  City  Government,  pp.  276-277. 


204  LOWER  LIVING  COSTS  IN  CITIES 

whooping  cough,  mumps,  scarlatina,  diphtheria,  influenza, 
small-pox,  trachoma,  need  no  longer  harass  and  under- 
mine the  vitality  of  school  children,  and  cause  a  vast 
educational  loss  through  poor  attendance  and  listless 
work.  Even  those  children  "with  just  a  cold"  are  now 
being  isolated  and  the  spread  of  colds  thus  prevented. 
Trachoma,  which  not  only  impairs  the  health  but  leads 
to  blindness,  is  already  being  practically  stamped  out  in 
all  American  cities,  save  where  newly  arriving  immi- 
grants constantly  bring  new  sources  of  contagion.  Con- 
junctivitis is  being  checked  since  it  is  known  to  be  a 
germ  disease.  Sixty-nine  per  cent,  of  the  1,219  children 
examined  in  Edinburgh  had  some  skin  disease,  and  60 
per  cent,  had  sores  due  to  head  lice.  Such  neglect  as 
this  must  hereafter  be  direct  evidence  of  criminal  neg- 
lect on  the  part  of  school  officials.  Sanitary  drinking 
fountains  and  drinking  cups,  and  individual  paper  towels 
are  doing  much  to  prevent  the  spread  of  other  diseases. 
Many  a  schoolroom  is  no  longer,  and  no  schoolroom 
ought  ever  again  to  be,  a  center  for  contagious  disease. 
The  school  is  the  ideal  place  for  the  inculcation  of 
proper  habits  and  standards  of  hygiene.  Close  associa- 
tion with  medical  experts  is  giving  new  meaning  and 
new  effectiveness  to  the  teaching  of  hygiene.  Pupils 
can  be  taught  reasons  for  the  sanitary  drinking  fountain, 
the  individual  towel,  the  automatic  control  of  tempera- 
ture; they  can  be  taught  to  see  the  place  and  value  of 
ventilation  of  cloakrooms,  what  diseases  are  infectious 
and  why,  the  reasons  for  the  isolation  of  children  with 
communicable  diseases,  the  place  and  value  of  recrea- 
tion, the  importance  of  corrective  gymnastic  exercises. 
In  all  day  schools,  but  more  particularly  in  trade,  manual 
training,  and  vocation  schools,  there  is  a  rare  opportunity 
for  instilling  adequate  sanitary  and  hygienic  standards 
which  will  later  be  demanded  rigidly  for  the  workshop, 


PRODUCTIVITY  205 

the  store  and  the  factory.  The  home  cannot  but  feel 
the  impetus  of  wholesome  hygienic  conditions  when  such 
standards  are  inculcated  at  the  school  desk. 

To  the  school  doctor  and  the  teaching  of  hygiene  in 
the  schoolroom  can  be  added  the  work  of  the  school 
nurse — the  instructor  of  parents,  pupils  and  teachers, 
the  efficient  link  between  the  school  and  the  home. 

The  cost  of  medical  inspection  of  school  children 
is  comparatively  slight.  In  general,  the  per  capita  cost 
ranges  from  ten  to  fifty  cents  per  annum.  "It  seems 
to  be  a  fair  generalization  to  say,"  concludes  the  study 
made  by  the  Department  of  Hygiene  of  the  Russell  Sage 
Foundation,  "that  medical  inspection  for  the  detection 
of  contagious  diseases  can  be  adequately  performed  at  an 
annual  cost  of  about  fifteen  cents  per  capita,  while  physi- 
cal examinations,  similarly  performed,  and  including  in- 
spection for  the  detection  of  communicable  diseases,  cost 
about  fifty  cents." 

Of  greater  importance  to  adult  vitality  than  inspec- 
tion for  communicable  diseases  is  the  physical  examina- 
tion of  school  children  for  physical  defects.  Of  the 
275,641  school  children  examined  in  the  Borough  of 
Manhattan  in  New  York  City  in  1905-07,  198,139  were 
found  to  be  in  need  of  treatment.  Seventy-one  and  nine- 
tenths  per  cent,  of  the  children  needed  treatment.  Of 
these  i  per  cent,  had  pulmonary  diseases,  21.2  per  cent, 
were  afflicted  with  defective  vision,  1.2  per  cent,  were 
afflicted  with  defective  hearing,  15.8  per  cent,  had  ob- 
structed nasal  breathing,  49.0  per  cent,  had  defective 
teeth,  27.4  per  cent,  had  hypertrophied  tonsils,  16.9  per 
cent,  had  posterior  nasal  growths,  and  2.5  per  cent,  were 
afflicted  with  defective  mentality.1  Of  the  19,381  school 
children  examined  in  Rochester  in  1912,  32,184  abnor- 
malities were  found,  1,524  of  which  were  defects  in 

1  Allen:    "Civics  and  Health,"  p.  37. 


206  LOWER  LIVING  COSTS  IN  CITIES 

vision,  534  in  hearing,  1,124  in  nasal  breathing,  7,942 
in  teeth,  5,496  in  hypertrophied  tonsils  and  2,815  in  ade- 
noids.1 Other  investigations  show  that  malnutrition 
runs  as  high  as  7  per  cent,  in  the  school  children  in 
working-class  districts. 

"Inspections  in  several  of  our  large  cities  show  that 
about  25  per  cent,  of  the  children  have  eye-strain ;  that 
more  than  two-thirds  of  them  between  the  ages  of  seven 
and  nine  have  defective  teeth ;  that  diseases  of  the  nose 
and  throat,  particularly  nasal  obstructions,  exist  in  from 
6  to  25  per  cent,  of  them  according  to  age  and  social 
condition;  and  that  malnutrition  (running  as  high  as 
70  per  cent,  of  the  children  in  the  schools  in  the  working- 
class  districts)  is  everywhere  so  common  in  our  large 
cities  as  to  be  a  menace  to  the  physical  welfare  of  the 
country."  2 

It  needs  no  argument  to  show  the  great  value  of  ex- 
aminations for  such  physical  defects.  The  removal  of 
adenoids,  the  correction  of  vision,  the  remedying  of 
defective  hearing  before  it  is  too  late — all  this  means 
both  greater  progress  in  school  and  greater  vitality  in 
later  life.  And  both  of  these  betoken  greater  productive 
power  for  the  future. 

European  cities  have  taken  the  lead  in  founding  free 
dispensaries  for  school  children.  It  is  just  as  vital  to 
a  democracy  to  have  a  citizenry  of  sound  bodies  as  to 
have  an  educated  citizenry.  We  have  gone  far  toward 
giving  equal  educational  facilities  for  all,  but  until  facili- 
ties equally  as  adequate  and  equally  as  free  for  health 
and  vitality  are  provided,  the  old  phrase  about  a  sound 
mind  in  a  sound  body  will  remain  ironical  cant.  Sound 
teeth  are  essential  to  digestion  and  the  dentist  is  essen- 
tial to  sound  teeth.  Now  many  a  family,  either  through 

1  The  American  City,  October,  1913,  p.  317. 

*  Beard:    "American  City  Government,"  pp.  275-276. 


PRODUCTIVITY  207 

inadequate  means  or  through  improper  standards,  will 
not  give  their  children  adequate  dental  care  even  after 
it  is  known  that  such  care  is  urgent.  The  only  remedy 
is  the  establishment  of  free  dental  dispensaries  for  school 
children.  The  same  situation  necessitates  free  dispen- 
saries for  the  removal  of  adenoids,  for  the  correction  of 
defective  vision  and  hearing,  for  the  curing  of  enlarged 
glands,  and  for  the  care  of  skin  and  other  contagious  dis- 
eases. In  Philadelphia's  free  eye  clinic  2,173  cases  of 
defective  vision  were  treated  in  one  year,  and  glasses 
furnished  to  1,710  cases. 


CARE  OF  INFANTS 

Special  protection  and  care  of  infants  find  a  quick 
response  in  a  diminished  death  rate.  In  but  few  fields 
of  health  work  are  results  so  quickly  seen  and  efforts 
so  amply  rewarded.  "The  need  for  such  effort  is  evi- 
dent," said  Dr.  A.  C.  Abbott,  in  a  recent  address,  "when 
we  remember  that  of  1,000  children  born  there  die  dur- 
ing the  first  year  of  life,  in  our  cities  of  average  com- 
position, from  150  to  200  annually,  and  that,  through- 
out our  communities  in  general,  from  45  to  50  per  1,000 
die  before  reaching  five  years  of  age.  In  spite  of  this 
condition,  which  is  now,  in  general,  better  than  was 
formerly  the  case,  New  York  City,  offering  one  of  the 
most  difficult  of  problems  in  this  particular,  has,  by  un- 
remitting, intelligent  effort,  cut  the  mortality  rate  of 
infants  under  one  year  of  age  from  244  to  102  per  1,000 
in  the  space  of  twenty-six  years.  What  has  been  done 
in  that  city  can  be  done  elsewhere  by  corresponding 
energy  and  expenditure  of  money." 

Berlin  decreased  the  death  rate  of  infants  of  one  year 
or  younger  from  305  per  1,000  in  1882  to  197  per  1,000 


208  LOWER  LIVING  COSTS  IN  CITIES 

in  1907,  a  decrease  of  35  per  cent,  in  twenty-four  years. 
Through  the  cooperation  of  private  organizations  and 
health  authorities,  Philadelphia  reduced  the  death  rate 
of  her  infants  under  two  years  of  age  from  6,530  in  1910 
to  5,619  in  1913,  a  decrease  of  13  per  cent.  In  five 
years  the  death  rate  of  infants  in  New  York  City  was 
reduced,  through  the  combined  activities  of  private  or- 
ganizations and  the  health  authorities,  from  144  to  102 
per  1,000.  Such  facts  as  these  reflect  what  happy  profits 
are  returned  from  moneys  and  energies  spent  in  the 
special  protection  and  care  of  infants. 

This  care  and  protection  include :  ( i )  fresh  air  facili- 
ties and,  where  needed,  hospital  facilities,  such  as  are 
offered  in  Philadelphia  on  the  Race  Street  Pier;  (2) 
advice  and  help  to  mothers  given  through  (a)  bulletins 
such  as  those  issued  by  the  Boston  Board  of  Health, 
but  more  particularly  through  (b)  visiting  nurses  who 
go  directly  to  the  homes,  and  (c)  through  milk  stations, 
whether  supported  by  private  organizations  or  public  au- 
thorities, at  which  milk  unquestionably  pure  can  be  se- 
cured. 

The  purity  of  the  milk  supply,  all-important  for  the 
young,  is  vital  to  adults  as  well.  The  difficulty  in  get- 
ting a  pure  milk  supply  for  cities  lies  in  the  number  and 
complexity  of  sources  from  which  urban  milk  supplies 
come.  Professor  Beard1  states  that  New  York  City  draws 
its  milk  supply  (one  and  one-half  million  quarts  daily) 
from  over  40,000  dairies  scattered  through  seven  states. 
This  milk  is  distributed  by  nearly  6,000  wagons  to  over 
12,000  stores.  For  the  inspection  of  this  milk  there 
were,  in  1906,  14  New  York  City  inspectors  in  the  coun- 
try and  1 6  in  the  city.  The  country  inspectors  could 
have  made  their  rounds  of  all  the  areas  and  farms  sup- 
plying milk  no  oftener  than  once  a  year,  while  the  city 

1  Beard:  "American  City  Government,"  p.  274. 


PRODUCTIVITY  209 

inspectors  could  make  their  rounds  no  oftener  than  once 
in  30  to  40  days.  Mr.  Arthur  E.  Post,  special  inspector 
in  the  Department  of  Public  Works,  Philadelphia,  found 
that  Philadelphia's  milk  supply  "comes  from  Pennsyl- 
vania, New  Jersey,  Delaware  and  Maryland,  with  now 
and  then  a  minor  quantity  from  New  York  state.  The 
maximum  haul  is  about  150  miles  and  the  average  haul 
about  50  miles.  This  milk  is  produced  on  about  12,000 
farms  outside  the  city  limits  and  200  farms  within  the 
city  limits.  Practically  all  of  our  milk  is  hauled  to  town 
by  the  common  carriers :  very  little  milk  is  brought  into 
the  city  directly  by  wagons  from  the  farms.  Within  the 
city  this  milk  is  distributed  by  about  370  dealers,  who 
have  their  own  wagon  routes,  and  milk  is  also  sold  in 
some  2,500  stores  and  shops  of  various  kinds.  The 
milk  dealers  pay  the  farmer  about  four  cents  a  quart 
and  this  same  milk  is  retailed  at  eight  cents  a  quart 
or  more."  The  wholesomeness  of  Philadelphia's  milk 
supply  depends  on  the  efficiency  of  one  chief  inspector 
of  milk,  who  draws  a  salary  of  $1,900  a  year,  and  four- 
teen assistant  inspectors  on  a  salary  of  $1,020  per  year. 
The  small  town  of  Jamestown,  New  York  (population 
31,297),  has  75  milk  dealers  coming  from  250  dairies 
and  farms.  It  is  safe  to  state  that  the  average  age  of 
milk  when  it  reaches  the  city  is  from  45  to  48  hours. 

The  evident  impossibility  of  safeguarding  by  city  in- 
spection the  contamination  of  the  milk  at  the  source, 
whether  through  unhealthy  or  unclean  cows,  or  im- 
properly cleansed  cans,  is  leading  generally  to  the  con- 
clusion that  the  city's  milk  supply  must  all  be  pasteu- 
rized. Thus  in  New  York  and  Philadelphia  no  milk  not 
pasteurized  or  "certified"  can  now  be  sold. 

The  cost  of  pasteurization,  i.  e.,  the  cost  of  holding 
the  milk  at  a  temperature  of  about  145°  F.  for  thirty 
minutes,  is  negligible,  being  from  one-fourth  to  one-half 


210  LOWER  LIVING  COSTS  IN  CITIES 

cent  per  quart,  and  most  authorities  now  hold  that  the 
chemical  constituents  of  the  milk  are  not  changed  by 
heat.  But  pasteurization  fosters  uncleanliness  and  care- 
lessness on  the  part  of  the  milk  producer.  Clean,  raw 
milk  is  no  doubt  to  be  preferred  to  pasteurized  milk, 
but  it  costs  money,  the  dairyman  usually  feels,  to  have 
ideal  conditions  in  his  dairy.  The  tendency  of  the  dairy- 
man, therefore,  if  his  milk  is  to  be  pasteurized  anyway, 
is  to  neglect  the  necessary  precautionary  measures  as  to 
cleanliness.  Moreover,  while  the  cost  of  pasteurization 
is  negligible  to  the  large  dairyman,  it  is  practically  pro- 
hibitive to  the  small  farmer. 

The  New  York  Milk  Committee,  which  is  a  voluntary 
organization  working  in  the  interests  of  improving  the 
milk  supply  of  New  York  City,  decided  in  March,  1911, 
to  appoint  a  Commission  on  Milk  Standards.1  This 
commission  found  some  of  the  essentials  for  assuring 
pure  milk  in  cities  to  be  as  follows:  licenses  must  be 
required  for  selling  and  permits  for  the  production  of 
milk  for  sale;  cow  stables  must  be  "light,  well  ven- 
tilated and  clean" ;  the  milk  room  must  be  "clean,  light 
and  well  screened" ;  a  physical  examination  of  all  cows 
shall  be  made  at  least  every  six  months  by  a  veterinarian 
approved  by  the  health  authorities;  the  employees  shall 
be  "personally  clean  and  shall  wear  clean  outer  gar- 
ments"; the  "milk  shall  be  cooled  to  50°  F.  or  below 
within  two  hours  after  it  is  drawn  from  the  cow  and 
it  shall  be  kept  cold  until  delivered  to  consumer" ;  quan- 
tities in  less  than  20  quarts  or  more  shall  be  delivered 
in  single  service  containers;  receiving  stations  and  bot- 
tling plants  shall  be  "clean,  well  screened  and  lighted" ; 

1  Its  conclusions  adopted  at  the  meeting  held  in  Richmond, 
Virginia,  May  2  and  3,  1913,  have  been  reprinted  by  the  Na- 
tional Government  as  Reprint  *No.  141  from  the  Public  Health 
Reports. 


PRODUCTIVITY  211 

stores  retailing  milk  shall  be  provided  with  a  suitable 
room  or  compartment  at  which  the  milk  shall  be  kept  at 
a  temperature  not  exceeding  50°  F. ;  all  water  supplies 
shall  be  from  uncontaminated  sources ;  and  no  milk  con- 
taining less  than  3.25  per  cent,  but  more  than  2.5  per 
cent,  of  milk  fat  shall  be  sold,  unless  the  container  is 
"conspicuously  marked  'sub-standard  milk' " ;  that  milk 
shall  not  contain  more  than  100,000  bacteria  per  cubic 
centimeter;  that  pasteurized  milk  shall  be  "heated  at  a 
temperature  of  140°  F.  for  not  less  than  20  minutes,  or  at 
a  temperature  of  155°  F.  for  not  less  than  5  minutes." 

The  realization  of  these  standards  means  that  either 
the  state  must  undertake  the  inspection  of  dairies  and 
milk  supplies  for  all  consumers,  or  that  the  cities  must 
limit  their  milk  dealers  to  a  number  sufficiently  small  as 
to  be  thoroughly  inspectable  by  the  city's  staff  provided 
for  that  purpose.  Boston's  milk  supply  is  already  prac- 
tically handled  by  but  four  or  five  dealers.  The  econo- 
mies in  such  centralization  were  strikingly  brought  out 
by  a  report  on  "The  Economic  Problems  of  Milk  Distri- 
bution in  Their  Relation  to  the  Public  Health,"  by  John 
R.  Williams,  M.D.1  This  was  an  intensive  study  of  the 
milk  supply  and  milk  distribution  in  Rochester,  N.  Y. 

1  "For  the  purpose  of  intensive  work,  the  city  was  divided  into 
a  number  of  districts.  It  was  found,  for  example,  in  the  fourth 
section  there  were  27  milk  dealers  supplying  273  homes.  'These 
27  dealers  travel  more  than  25  miles  in  this  district,  whereas 
one  dealer  could  render  the  same  service  traveling  not  more  than 

2.6  miles.    In  section  8  there  are  57  distributors  traveling  more 
than  30  miles  daily  in  the  section  to  supply  363  homes  with  milk. 
One  distributor  could  render  this  same  service  in  a  travel  of 

1.7  miles.    On  many  streets  there  is  a  milk  dealer  for  every  two 
homes;  oftentimes  several  different  dealers  will  be  found  going 
to  one  home.    In  one  case  nine  peddlers  were  found  supplying 
one  pint  each  to  one  home.'     Reprinted  from  the  Transactions 
of  the  Fifteenth   International   Congress   on    Hygiene   and   De- 
mography, held  at  Washington,  D.  C,  September  23  to  28,  1912." 


212  LOWER  LIVING  COSTS  IN  CITIES 

Dr.  Williams  decided  that  through  concentration  "at 
least  $100,000  could  be  saved  in  unnecessary  investment 
in  real  estate,  milk-room  equipment,  and  horses  and 
wagons"  in  distributing  milk  in  Rochester.  "The  econo- 
mies resulting  from  this  combination  and  concentration," 
he  continued,  "would  reduce  the  cost  of  distribution  at 
least  $300  daily."  1 

The  dangers  inherent  in  monopolistic  control  of  a  city's 
milk  supply,  coupled  with  the  unquestionably  depressing 
effect  on  milk  production  and  farming  efficiency  among 
small  farmers  in  all  parts  of  the  surrounding  communi- 
ties, seem  to  lead  to  the  conclusion  that,  in  lieu  of  en- 
couraging monopoly,  such  as  must  be  done  if  the  city  is 
to  safeguard  its  own  milk  supply,  a  better  policy  is  for 
the  state  to  undertake  the  inspection  of  dairies  and  milk. 
Pure  milk  is  as  important  for  the  country  as  for  the 
city.  Moreover,  the  total  number  of  inspectors  required 
if  each  city  had  its  own  inspecting  staff  would  be  sev- 
eral fold  the  number  of  inspectors  required  under  cen- 

1  He  justifies  this  conclusion  as  follows :  "In  all,  173  dis- 
tributors were  studied.  These  represent  practically  the  entire 
milk  industry  of  the  city.  The  enormous  waste  and  the  saving 
that  could  be  effected  by  proper  distribution  incident  to  the  dis- 
tribution of  milk  are  more  clearly  set  forth  in  the  following 
comparative  tabulation : 

Under  Present  System  Under  Model  System 

356  men,  and  in  many  cases  their  families  90  men 

380  horses     '  so  horses 

305  wagons  25  horse-drawn  trucks 

2.500  +  miles  travel  300  miles  travel 

$76,600  invested  in  milk-room  equipments  $75,000  equipment'for  sanitary  plant 

$108,000  invested  in  horses  and  wagons  $30,750  equipment  of  horses  and  trucks 

$2 ,000  present  daily  cost  of  distribution  $600  estimated  daily  cost  of  distribution 

$720,000  yearly  cost  of  distribution  $220,000  estimated  yearly  cost  of  dis- 
tribution 

In  the  foregoing  estimates,  liberal  provision  is  made  for  amortization,  interest, 
and  superintendence.  Mention  is  not  made  of  all  the  wastes  that  could  be  obviated 
under  efficient  management,  and  it  is  believed  that  conclusions  here  presented 
represent  most  conservative  judgment.  There  is  little  question  that  if  the  milk 
supply  of  Rochester  were  to  be  distributed  by  one  agency,  properly  organized  and 
equipped,  a  saving  to  consumers  of  at  least  $500,000  yearly  could  be  effected. " — 
John  R.  Williams,  M.D.:  "The  Economic  Problems  of  Milk  Distribution 
in  Their  Relation  to  the  Public  Health. " 


PRODUCTIVITY  213 

tralized  inspection.  Centralization  of  inspection  would, 
therefore,  result  in  large  economies.  Thus  in  Essex 
County,  New  Jersey,  there  are  sixteen  municipalities, 
each  of  which  has  its  own  milk  inspecting  force.  In 
other  words,  every  dairy  in  the  county  has  to  be  in- 
spected as  many  times  as  there  are  cities  to  which  its 
milk  is  or  might  be  sent.  The  need  for  central  control 
is  made  all  the  more  apparent  in  view  of  the  character 
of  inspection  needed.  In  the  first  place,  qualified  veteri- 
narians must  give  tuberculin  tests  and  periodically  ex- 
amine the  physical  condition  of  all  the  cows  from  which 
the  city  draws  its  milk  supply.  Then  qualified  physicians 
must  give  clean  bills  of  health  to  all  employees  handling 
this  milk.  The  barns  and  the  milk  cans  must  then, 
through  inspection,  be  kept  up  to  proper  sanitary  stand- 
ards. The  cooling  of  the  milk,  the  temperature  at  which 
it  is  brought  into  the  city  and  the  conditions  under  which 
it  is  kept  and  sold  within  the  city,  all  responsibility  for 
refrigeration  in  transit — all  these  need  supervision  and 
inspection.  State  inspection  of  milk  is  the  logical  solu- 
tion for  pure  milk  at  minimum  costs.  The  state's  work 
can  be  supplemented  by  assistance  from  national  bureaus. 
After  the  state  assumes  the  inspection  of  the  milk, 
the  city  can  reduce  its  milk  costs  and  guarantee  the  qual- 
ity of  its  milk  supply  through  municipal  milk  stations  at 
which  milk  not  of  the  required  standard  can  be  pas- 
teurized and  placed  in  properly  sterilized  receptacles 
and  delivered  in  vehicles  equipped  in  a  sanitary  manner 
for  milk-carrying  purposes.  Pasteurization  could  thus 
be  done  at  minimum  costs  and  the  element  of  waste  in 
distribution  could  be  eliminated.  Mayor  Samuel  A. 
Carlson,  of  Jamestown,  N.  Y.,  found  that  a  milk  station 
could  be  built  in  that  city  at  a  cost  of  $20,000,  "the 
entire  amount  of  which  could  be  paid  from  the  first 
year's  revenue,  after  which  a  substantial  reduction  in 


214  LOWER  LIVING  COSTS  IN  CITIES 

the  price  of  milk  could  be  made."    Much  could  be  done, 
too,  by  encouraging  milk  distribution  by  trolley  freight. 

ADULT  VITALITY 

If  urban  productivity  is  to  reach  its  maximum,  the 
relations  of  vitality  to  fatigue  must  be  more  clearly 
recognized,  and  not  merely  recognized,  but  translated 
into  action  by  both  employers  and  employees.  In  his 
"Report  on  National  Vitality,"  page  47,  Professor  Irving 
Fisher  says:  "The  economic  waste  from  undue  fatigue 
is  probably  much  greater  than  the  waste  from  serious 
illness.  .  .  .  The  number  that  suffer  partial  disability 
through  undue  fatigue  certainly  constitute  the  great 
majority  of  the  population.  No  observer  can  fail  to 
conclude  that  this  is  true  of  the  American  working,  busi- 
ness, and  professional  classes,  and  the  latest  word  among 
the  students  of  school  hygiene  is  that  it  is  true  to  a  large 
extent  even  among  children.  If,  therefore,  we  assume 
that  only  50  per  cent,  of  the  population  is  suffering 
some  impairment  of  its  best  powers  through  undue  fa- 
tigue, we  are  on  safe  ground.  The  extent  to  which  the 
power  of  this  supposed  50  per  cent,  of  the  population 
is  impaired  must  certainly  exceeed  10  per  cent.  .  .  . 
Yet  if  only  50  per  cent,  of  the  population  is  suffering 
an  impairment  equal  to  only  10  per  cent,  of  its  working 
powers,  the  result  is  equivalent  to  5  per  cent,  of  the 
population  suffering  total  impairment,  which  is  more 
than  the  4  per  cent,  impairment  from  serious  illness." 

Through  a  proper  study  of  fatigue  curves,  and  through 
the  scientific  selection  of  the  worker,  the  amount  of 
pig  iron  loaded  at  the  Bethlehem  Steel  Works  per  man 
was  increased  from  12.^/2.  tons  to  47  tons  per  day,  and 
a  study  of  fatigue  and  efficiency  by  certain  employers 
has  revealed  that  the  eight-hour  day  is,  judged  by  re- 


PRODUCTIVITY 


215 


suits,  for  them  the  most  economical  day.  Scientific 
management  is  teaching  much  of  value  as  to  how  to  con- 
serve energies  and  secure  results  without  transgressing 
on  the  fatigue  limit,  and  thus  pauperizing  the  employee 
and  the  industries  dependent  on  him. 

Coupled  with  such  studies  by  employers  is  a  study  of 
the  relation  of  fatigue  to  the  drinking  of  alcoholic  liquors 
and  the  need  for  vice  control.  It  would  seem  clear  that 
the  community  by  furnishing  recreation  centers  and 
other  social  substitutes  for  the  saloon  will  reap  boun- 
tifully from  its  investments  in  the  way  of  increased 
output  and  a  more  effective  citizenry.  For  these  ends, 
too,  a  definite  social  responsibility  rests  upon  all  em- 
ployers. 

The  close  relation  between  environment,  earning 
power  and  physical  defects  is  well  shown  in  the  table 
given  below,  worked  out  by  Dr.  Allen  and  quoted  in  his 
book  on  "Civics  and  Health,"  page  39.1  The  lower  the 

1  EFFECT  OF  ENVIRONMENT  ON   PHYSICAL  DEFECTS 


SHOWING  PER  CENT.  SHARE  OF 
PHYSICAL  DEFECTS  OF  CHIL- 
DREN, UNFAVORABLE  HOUS- 
ING CONDITIONS  AND  CHILD 
MORTALITY   FOUND   AMONG 
EACH       FAMILY       INCOME 
GROUP. 

WEEKLY  FAMILY  INCOME 

$0-10 

$10-15 

$16-19 

$20-25 

$25-29 

$30 
and 
Over 

$IOO 

Proportion  to  total  families.  .  . 
Physical  Defects 

% 
8.4 

13.8 
8.6 
9.6 
8.1 

8.2 
8.2 

6.9 

IO.I 

8.6 

10.3 
6-4 
II.  7 

8.9 

4.2 

% 
32-7 

43-4 
37-4 
32-3 
32.2 
34-6 

35-4 
30.2 
38.5 

27.6 

35-5 
30.1 
36.2 

37  6 
19-5 

% 
15-2 

12.4 
14.6 
15-5 
15-3 
16.5 

18.1 
18.9 
16.5 

21.7 

14-7 
15-7 
13-1 

18.3 
13.2 

% 
23-8 

17-9 

22.6 
24.4 
24-5 
22.1 

18.4 
26.4 
19.7 

14-7 

20.5 
26.9 
20.8 

18.8 
30.3 

% 
3-9 

3-4 
3-6 

2.8 

4-8 
1.4 

3-8 

3-2 

4-4 

5-4 
2-4 
6.1 

4- 
II.  5 

% 
15-6 

9. 
13-2 
15.4 
IS.I 

17-3 

15.9 
19.6 
10.8 

27.6 

13.6 
18.6 

12.  I 
12.4 

21.3 

% 

IOO 

IOO 
IOO 
IOO 
IOO 
IOO 

IOO 
IOO 
IOO 

IOO 

IOO 
IOO 
IOO 

IOO 
IOO 

Enlarged  glands  

Bad  teeth  

Unfavorable  Housing  Condi- 
tions 
Dark  rooms  

Closed  airshaft  

No  baths  

Paying  over  25  per  cent, 
rent  
Child  mortality 
Families  losing  children  .  .  . 
Families  losing  no  children. 
Children  dead  

Infants  dying    from    intes- 
tinal diseases  

Children  working  

216  LOWER  LIVING  COSTS  IN  CITIES 

income,  the  larger  the  number  of  physical  defects;  and 
the  larger  the  number  of  physical  defects,  the  lower  the 
income.  It  is  this  vicious  circle  that  more  than  any- 
thing else  prevents  a  larger  increase  in  the  total  social 
income.  It  seems  clear  that  a  minimum  wage  of  $8  a 
week  for  women,  or  $10  a  week  for  men,  and  a  family 
income  of  $800  per  year,  is  necessary  to  a  healthy,  pro- 
ductive life.  The  relation  between  health  and  social 
conditions  is  so  close  as  to  demand  the  attention  of  every 
person  interested  in  urban  welfare. 

Other  ways  by  which  loss  of  time  can  be  prevented 
through  illness  and  physical  incapacity  are :  better  protec- 
tion from  machinery;  prevention  of  accidents  and  com- 
pensation for  accidents  through  workmen's  compensation 
acts ;  laws  restricting  child  and  woman  labor,  and  active 
civic  attention  to  housing  and  recreation  problems. 

For  all  social  and  individual  carelessness  in  the  pro- 
tection and  conservation  of  health,  society  pays  in  hos- 
pitals, charity  asylums,  refuge  homes  for  the  poor,  and, 
of  course,  in  lowered  vitality  and  decreased  productive 
power  of  its  workers.  In  these  various  ways  every  tax- 
payer contributes  to  bringing  the  wage  up  to  a  living 
wage.  It  must  be  recognized,  after  all,  that  a  living 
wage,  whether  it  comes  through  statute  or  through  social 
justice,  is  necessary  for  the  elimination  of  social  waste 
and  the  efficient  organization  of  society.  Wealth  first 
begets  health,  then  health  begets  wealth. 

The  supreme  justification  of  the  complex  activities  of 
public  officials  and  private  organizations  is  the  inculca- 
tion of  habits  of  health  and  of  adequate  hygienic  stand- 
ards— standards  that  will  ultimately  make  of  every  in- 
dividual his  own  health  inspector.  These  standards  have 
been  effectively  impressed,  not  only  by  the  action  of  pub- 
lic officials,  physicians  and  surgeons,  but  also  by  effective 
publicity  campaigns  for  the  elimination  of  flies  and  fresh 


PRODUCTIVITY  217 

air  campaigns  for  the  prevention  of  tuberculosis.  Of  like 
effect  also  are  the  anti-spitting  ordinances ;  the  public 
drinking  fountains ;  the  flushing  of  the  streets ;  the  in- 
spection of  food,  drugs  and  milk;  housing  regulations; 
factory  laws,  and  labor  legislation.  These  factors  have 
done  more  than  merely  to  prevent  the  spread  of  disease 
and  the  lowering  of  vitality.  They  have  been  powerful 
creative  forces  in  increasing  health  and  thus  multiplying 
productive  power. 

Waste  through  sickness  and  incapacity  can  be  elimi- 
nated, vitality  increased  and  productive  power  furthered 
through  wise  public  activity  in  conserving  health  and  en- 
couraging vitality.  These  activities  in  the  end  will  be 
translated  into  money  and  social  prosperity  through  a 
longer  working  life  and  through  labor  more  efficiently 
and  energetically  done. 


CHAPTER   XV 
VITALITY  THROUGH   RECREATION 

A  prerequisite  to  healthy  children  and  vitality  in  adults 
is  wholesome  recreation.  Ambition  and  earning  power 
are  born  of  physical  energy  as  well  as  of  stimulation 
from  environment  As  a  rule  the  child  anemic  and 
frail  from  want  of  proper  recreation  means  an  adult 
of  low  vitality  and  complacently  unproductive. 

A  saunter  through  the  crowded  sections  of  almost  any 
American  city  will  soon  convince  one  that  Dickens' 
phrase,  "The  bucket  of  a  human  well,"  aptly  describes 
the  "recreation  center"  in  many  urban  sections.  The 
baby  as  he  crawls  wipes  up  the  filth  of  alley  and  street. 
The  boy  must  play  with  other  "gutter  urchins"  in  nar- 
row passageways  or  in  side  streets.  The  lad  in  ado- 
lescence can  find  expression  for  the  group  spirit  only 
in  the  gang.  Young  women  and  young  men  must  meet 
their  "company"  in  the  street  or  in  the  commercialized 
dance  hall;  and  the  laborer  home  from  work  must  take 
his  evening  rest  on  a  back  fire  escape  overlooking  a  sea 
of  clothes  lines  and  back  alley  debris. 

There  is  a  special  reason  for  recreational  facilities 
that  energize  young  workers.  So  long  as  society  allows 
the  young  to  be  workers,  the  least  it  can  do,  in  all  con- 
science, is  to  grant  them  facilities  for  play  and  recrea- 
tion when  work  hours  are  over.  Justice  demands  this 
all  the  more  because  the  child  laborer  is  employed  at 
deadening  tasks — indeed,  is  scarcely  less  a  machine  than 
the  machine  he  tends.  A  study  of  the  occupations  of 

2lR 


VITALITY  THROUGH  RECREATION          219 

children  between  the  ages  of  14  and  18  years  in  a  cer- 
tain section  of  the  Borough  of  Manhattan,  made  by  the 
Committee  on  School  Inquiry  in  the  City  of  New  York, 
showed  that  "out  of  24,765  children  reported  on,  22,781 
were  employed  in  occupations  having  more  than  100 
workers,  in  which  the  vast  majority  were  performing 
tasks  of  a  routine  or  an  automatic  rather  than  an  en- 
ergizing sort,  and  of  the  1,984  employed  in  smaller  in- 
dustries, not  more  than  one-half  were  engaged  in  occu- 
pations which  might  be  classified  as  invigorating  or 
stimulating." 

Juvenile  offenses,  classified  in  order  of  their  frequency 
— stealing,  incorrigibility,  disorderly  conduct,  assaults 
and  malicious  mischief — show  that  such  offenses  are  the 
direct  result  of  a  disordered  social  conception  that  tol- 
erates huge  expenditures  for  needless  boulevards,  while 
leaving  the  city's  present  and  future  workers  without 
adequate  recreational  facilities. 

The  simple  truth  is  that,  in  arrests,  in  police  protec- 
tion, in  court  procedure,  in  juvenile  detention  homes,  and 
in  young  women  and  young  men  bankrupt  physically 
and  debauched  morally,  the  taxpayers  of  American 
cities  are  daily  rendering  up  their  tribute  for  the  city's 
negligence  as  to  recreational  facilities.  This  tribute 
vastly  exceeds  in  good  money  the  sums  that  would  be 
needed  to  provide  proper  recreational  facilities  for 
young  and  old.  The  taxpayers  must  make  the  ex- 
penditures. The  only  question  is  whether  these  expendi- 
tures shall  be  for  negative  or  constructive  measures. 

The  argument  for  adequate  recreational  facilities  is 
not  solely  that  the  city  will  thereby  save  the  expenses 
of  caring  for  a  large  number  of  inadequates  caused  by 
the  want  of  wholesome  recreation.  Of  greater  im- 
portance is  the  fact  that  productive  power  can  be  stimu- 
lated in  no  other  way  so  directly  as  through  recreation, 


220  LOWER  LIVING  COSTS  IN  CITIES 

t 

and  through  the  moral  and  social  standards  of  the  type 
which  it  is  impossible  to  create  in  the  commercialized 
dance  hall  and  poolroom,  but  which  is  the  natural  out- 
growth of  healthful  play  for  the  young  and  vitalizing 
recreation  for  the  adult.  Play  alone  can  keep  children 
healthy.  The  brain-fagged  worker  in  the  counting-room 
and  the  fatigued  laborer  in  the  shop  will  have  excite- 
ment that  ends  in  debauch,  if  the  means  are  not  at  hand 
for  relaxation  that  ends  in  renewed  vitality.  If  the  city 
would  have  law-abiding  citizens  it  must  stop  making  law- 
lessness necessary  in  childhood.  And  every  city  makes 
outlaws  of  its  children  when  it  provides  no  opportunity 
for  play  save  in  breaking  ordinances.  The  gang  spirit 
under  normal  conditions  can  inculcate  lessons  of  co- 
operation of  inestimable  value  in  later  life :  under  abnor- 
mal conditions  it  can  find  expression  only  in  outlawry. 
"Tempt  not"  is  an  ancient  law  broken  by  every  city  which 
does  not  have  adequate  facilities  for  normal  recreation. 

"There  are  600  commercial  dance  halls  in  New  York 
City,  twelve  times  as  many  dance  halls  as  recreation  cen- 
ters." "In  addition  to  this  there  are  11,350  saloons,  800 
motion-picture  shows,  innumerable  poolrooms,  candy 
shops  and  theaters,  all  of  which  are  the  centers  of  an 
unregulated,  unsupervised  recreational  life."  This  situ- 
ation in  New  York  City  is  all  too  prevalent  in  other 
American  cities.  It  is  therefore  in  such  places  as  these 
more  than  in  the  home  or  in  the  school  that  civic,  moral 
and  social  standards  are  being  set  for  life.  The  choice 
open  for  cities  is  this:  Shall  the  moral  and  civic  stand- 
ards of  its  citizens  be  set  in  commercial  "places,"  the 
standards  of  which  are  determined  by  the  maximum  re- 
turn in  dollars  and  cents,  or  in  recreation  centers  whose 
ideals  are  shot  through  and  through  with  community  and 
individual  welfare? 

It  is  now  a  maxim  of  juvenile  court  procedure  that 


VITALITY  THROUGH  RECREATION          221 

children  should  not  be  thrown  into  association  with 
adults  before,  during,  or  after  trial.  Yet  without  proper 
recreational  facilities  the  children  of  our  cities  are  spend- 
ing all  of  their  playtime  under  just  such  associations. 
The  People's  Institute  of  New  York  City  found  156,600 
children  upon  the  streets  in  selected  sections  of  Man- 
hattan. The  children  were  "doing  their  best  at  health- 
ful, clean-minded,  hygienic  play,  but  the  games  were 
carried  on  in  indescribable  dirt  and  filth,  with  30,000 
leering  loungers  in  streets  and  saloons  looking  on,  many 
of  them  only  too  ready  with  sinister  suggestions  of 
evil."  Moral  and  civic  norms  of  the  type  needed  by  our 
cities  cannot  be  inculcated  amidst  adult  loafers ;  they 
can  only  be  inculcated  in  recreational  centers  where  the 
moral  atmosphere  is  as  clean  as  childhood  itself. 

The  urban  playground  and  recreation  center  can  be 
made  the  place  where  health  is  assured  and  life-long 
standards  set.  But  more  than  this,  it  can  be  made  the 
place  where  American  standards  and  ideals  are  incul- 
cated. A  census  of  the  attendance  at  the  Star-Garden 
Recreation  Park  in  Philadelphia  on  August  29,  1912, 
showed  that  of  the  morning  attendance  64  and  12  per 
cent,  respectively  of  the  1,141  males  in  attendance  were 
Russian  Jews  and  Italians,  while  70  per  cent,  of  the  670 
females  were  Russian  Jews  and  9  per  cent.  Italians.  In 
the  evening  of  the  males  in  attendance  54  per  cent,  were 
Russian  Jews,  22^  per  cent.  Italians,  9^  per  cent, 
colored,  and  14  per  cent,  miscellaneous;  of  the  females, 
84  per  cent,  were  Russian  Jews,  6  per  cent.  Italians, 
6  per  cent,  colored,  and  4  per  cent,  miscellaneous.  The 
miscellaneous  item  included  Poles  and  Greeks  as  well  as 
Americans.  Here  is  offered  a  rare  opportunity  for  the 
preservation  of  the  best  of  the  fatherland's  folk  ways 
and  customs  while  teaching  the  elements  of  American- 
ism. The  playground  can  be  made  as  effective  an  agent 


222 


LOWER  LIVING  COSTS  IN  CITIES 


for  assimilation  as  was  the  country  life  of  earlier  days 
— effective  because  it  preserves  the  best  of  the  old  while 
implanting  the  new. 

The  need  for,  the  use  and  the  various  types  of  recre- 
ation pursued  at  recreation  centers  is  shown  by  the 
fact  that  in  1912  the  attendance  at  certain  of  the  small 
parks  under  the  supervision  of  the  West  Chicago  Park 
Commission  totaled  2,980,000  for  the  various  functions 
specified  in  the  appended  footnote.1 

1  Attendance  on  the  activities  in  the  small  parks,  numbers  i, 
2  and  3,  and  in  Holstein  and  Douglas  Parks  during  the  year  1912 : 


Activities 

Park  i 

Park  2 

Park  3 

Holstein 

Douglas 

Swimming  pool: 
Men                             

83,311 
19,628 

69,591 

41,664 
80,298 
1,206 

108,009 
20,730 

33,842 
30,442 
76,606 

39,622 
11,083 

99,230 
43,36o 
105,755 
1,699 

148,731 
88,830 

130,755 
144.855 

Open 
Only 
From 
May  ist 
to 
Oct.  3  ist 

Women  

Outdoor   gymnasium   and   play- 
field: 
Men        

33,739 
33,017 
24,841 

Women  

Children's  playground  

Tennis  courts  

Skating  pond  

33,934 
6,159 

S.249 

29,426 
3,265 

15,650 

Garden  

Shower  baths: 
Men  

116,847 
34,666 

25,982 
12,063 

*35S 

40,284 

*72 

5,979 

96,293 
57,356 

21,696 
16,198 

*284 
69,100 

62,776 
9,022 

24,300 
9,022 

*225 
38,302 

30,028 
8,119 

7,852 
8,119 

*I26 

15,849 

Women  

Indoor  gymnasium: 
Men  

Women  

Assembly  hall: 
Occasions  

Attendance  

Lunch  room: 
Occasions  

Attendance  

350 

Club  rooms: 
Men  

8,649 
6,667 
18,065 
60,884 
8,200 
97,770 

16,200 
8,000 

12,663 
11,486 
15,672 
68,733 
4,900 
70,741 

22,000 
I7,4OO 

13,128 
10,865 
37,556 
57,577 
8,500 
13,409 

22,500 
15,500 

1,294 
1,115 

Women  

Children's  playroom  

Library  

5,831 
6,000 
13,687 

10,500 
Field 
house 
opened 
June  30, 
1912 

Field  and  track  events  

Playfield  

Concerts: 
Attendance  

Play  festivals  and  celebrations: 
Outdoors  

Totals  

796,047 

759,116 

685,776 

225,891 

5I3.I7I 

*  Not  included  in  totals. 


VITALITY  THROUGH  RECREATION          223 

The  Douglas  Park  Gymnasium  and  Natatorium,  under 
the  control  of  the  same  board,  were  attended  by  130,755 
boys  and  144,855  girls,  and  148,371  boys  and  88,830 
girls,  respectively.  The  attendance  on  the  various  recre- 
ational facilities  under  the  control  of  Chicago's  South 
Side  park  commissioners  in  1912  was  5,531,737.  Within 
half  a  mile  radius  of  eleven  of  these  South  Side  parks 
is  a  total  population  of  342,000.  Of  these  189,500,  or 
55  per  cent,  used  the  park  regularly.  As  only  those 
individuals  using  the  park  at  least  twice  a  month  were 
counted  as  regular  attendants,  this  percentage  is  exclu- 
sive of  the  thousands  that  flocked  to  special  occasions 
such  as  play  festivals.  Young  children  used  the  Shot 
Tower  Playground  in  Philadelphia  from  June  to  Septem- 
ber of  1913  19,170  times.  Up  to  December  31  the  at- 
tendance had  totaled  42,113.  And  this  on  a  playground 
150  feet  square. 


THE  FACILITIES  NEEDED 

The  recreational  facilities  needed  for  cities  may  be 
roughly  classified  as  those  used  for  supervised  recrea- 
tion for  children  up  to  and  including  the  age  of  six- 
teen, and  those  for  recreation  suitable  for  all  over 
sixteen  years  of  age.  The  facilities  for  children  un- 
der sixteen  need  special  adaptation  to  the  following 
groups:  (i)  those  up  to  three  years  of  age,  (2)  those 
from  three  to  six  years,  (3)  from  six  to  ten,  (4)  from 
ten  to  sixteen. 

The  facilities  needed  for  babies  include  nurseries, 
whether  paid  for  by  private  institutions,  churches,  chari- 
table organizations  or  the  city;  sand  piles  and  shelters, 
and  special  instructions  by  nurses  to  mothers  and  "lit- 
tle mothers." 


224  LOWER  LIVING  COSTS  IN  CITIES 

The  chief  need  for  children  of  from  three  to  six 
years  is  a  place  for  recreation  where  there  is  plenty 
of  light  and  air,  a  minimum  amount  of  dirt  and  dust, 
and  where  there  is  at  least  sufficient  supervision  to 
guarantee  play  free  from  the  intrusion  of  older  chil- 
dren. Simple  apparatus  and  games  must  also  be  pro- 
vided. 

For  children  of  from  six  to  ten  years  more  advanced 
kinds  of  games  with  organization  prominent  is  the  char- 
acteristic need.  This  is  the  period  when  the  gang  spirit 
should  find  opportunity  for  normal  expression  in  co- 
operative play.  Indoor  gymnasiums  and  outdoor  sports, 
shower  baths  and  the  swimming  pool,  the  school  gar- 
den and  nature  studies,  the  story  hour  and  the  reading- 
room  can  all  be  used  effectively  in  wholesome  growth, 
all  combine  in  inculcating  moral  and  social  standards 
and  in  laying  a  goodly  foundation  for  future  earning 
power. 

All  the  means  used  for  children  of  from  six  to  ten 
years,  and  many  others,  such  as  the  clubroom,  can  be 
used  with  increased  effectiveness  for  children  of  the 
ages  of  ten  to  sixteen  inclusive.  In  this  period  there 
is  need  for  well  organized  games  competently  guided; 
for  summer  camps;  for  lectures  and  other  educational 
facilities.  For  the  children  of  this  period  and  for  the 
older  ones  of  the  preceding  period,  play  festivals  are 
required;  folk  songs  and  dances;  field  days  and  com- 
petitive sports  such  as  baseball,  football,  tennis  and  skat- 
ing; dances  and  social  gatherings  and  the  assembly  halls 
in  which  to  hold  them,  and  free  evening  lectures  are  all 
requisites. 

For  adults  little  paid  supervision  is  needed.  For  this 
group  should  be  provided  the  swimming  pool,  the  recrea- 
tion pier,  the  large  park,  and  the  golf  course,  as  well 
as  opportunities  for  the  games  outlined  in  the  preceding 


VITALITY  THROUGH  RECREATION          225 

period.  But  of  greatest  importance  for  this  group  is  the 
social  center  under  neighborhood  control.  From  1905 
to  1912  inclusive  the  attendance  at  the  clubrooms  in 
Chicago's  South  Side  parks  increased  from  4,940  to  124,- 
714,  an  increase  of  nearly  2,500  per  cent.,  while  the 
attendance  in  the  assembly  halls  increased  from  27,709 
to  35,1,192,  an  increase  of  nearly  1,200  per  cent.  These 
two  types  of  recreation  showed  greater  increase  than 
did  those  of  any  other  type,  not  excepting  even  the 
shower  baths  and  the  outdoor  sports.  The  record  of 
attendance  at  the  clubrooms  showed,  moreover,  that  those 
rooms  are  used  consistently  throughout  all  the  year, 
though  the  attendance  was  somewhat  greater  during  the 
nine  months  of  autumn,  winter  and  spring.  The  same 
was  true  of  the  use  of  the  assembly  halls  and  reading- 
rooms.1 

The  appended  table  gives  the  uses  to  which  four 
of  the  smaller  recreation  parks  on  the  South  Side, 

1The  monthly  attendance  at  assembly  halls  for  the  year  1912 
was  as  follows :  March,  40,691 ;  April,  38,212 ;  May,  42,749 ;  June, 
30,594;  July,  11,322;  August,  6,794;  September,  14,568;  October, 
27,109;  November,  32,883;  December,  35,344;  January,  35,405; 
February,  35,521 ;  total,  351,192. 

At  the  clubrooms  the  attendance  was  as  follows :  March, 
11,321;  April,  11,498;  May,  11,760;  June,  10,669;  July,  7,933; 
August,  6,773;  September,  7,419;  October,  9,795;  November, 
11,591;  December,  11,291;  January,  11,467;  February,  13,196; 
total,  124,714. 

At  the  reading-rooms  the  attendance  was  as  follows :  March, 
56,856;  April,  37,744;  May,  40,668;  June,  37,794;  July,  44,690; 
August,  42,419;  September,  32,333;  October,  36,287;  November, 
43,023;  December,  41,006;  January,  42,612;  February,  38,395; 
total,  493,827. 

See  the  annual  report  of  the  South  Side  Park  Commis- 
sioners of  Chicago  for  the  year  ending  February  28,  1912, 
pp.  54-56. 


226 


LOWER  LIVING  COSTS  IN  CITIES 


Chicago,  were  put  during  the  year  19 12.1  These 
are  all  small  parks,  their  acreage  being  respectively 
8,  2.89,  3.75  and  1.94  acres,  making  a  total  of  i&/2 
acres. 

RECREATION  COSTS 

Recreational  facilities  can  be  obtained  in  cities  most 
economically  only  through  public  expense.  The  average 
annual  expenditure  for  recreation  of  391  families  cited  in 
Professor  Chapin's  "Standard  of  Living"  was  but  $9.73. 

1  Summary  of  the  uses  of  the  different  small  park  facilities  for 
the  year  1912,  on  the  South  Side,  Chicago. 


Facility 

Park  i 

Park  2 

Park  3 

Holstein 

8  Acres 

7 
1,640 
180 
488 
1,461 
152 
23 

21 

55 
7 
52 
27 

22 

49 

1.358 
1,338 

4 
68 
4 
5 
3 
II 
179 

289  Acres 

2 

i,  006 
114 
116 
139 
61 
9 
28 
56 
18 
3 
77 
33 
51 
1,370 
1,811 
I 
49 

5 
5 

3  M  Acres 

1  94  Acres 

2.  Playground  ball  games  

263 
136 
84 
355 
47 

21 

50 
31 
38 
9 
29 

7 
27 
16 

3.  Basketball  games  

4.  Indoor  ball  games  

5.  Tennis  games  

37 

7.  Concerts  indoor  

8.  Entertainments  

i 

12 

4 
9 
3 

o.  Lectures  

10.  Holiday  celebrations  

1  1.  Educational  gatherings  

12.  Socials  (no  dancing)  

14.  Average  number  of  clubs  using  park.  .  . 
15.  Average  total  membership  of  clubs.  .  .  . 
16.  Total  number  of  club  meetings  

40 
I.2OO 
1,  088 

6 
82 

2 
4 
5 

it 

248 
130 

18.  Refreshments  served  at  gatherings.  .  .  . 
19.  Track  meets  held     .        

6 

I 
5 

21.  Play  festival  celebrations  outdoors.  .  .  . 

70 
1,065 
680 
280 

26,090 

87 
59 

29 

225 

24.  Registration  for  men's  gymnasium  .... 
25.  Registration  for  women's  gymnasium  .  . 
26.  Registration  for  children's  playground. 

27.  Number  of  books  circulated  

1.  117 

575 
645 

43,844 

96 

42 

47 
355 

1,353 
743 

425 

49,461 

IOO 

4i 

59 
284 

632 
607 

Library 
Opened 
Dec.  16, 
1912 

28.  Number  of  days  natatorium  was  opened 
29.  Number  of  days  skating  

New 
Building 
Opened 
June  30, 
1912 

126 

30.  Number  of  wrestling  bouts  

31.  Number  of  times  assembly  hall  was 
used.  .                    .        

VITALITY  THROUGH  RECREATION          227 

Of  this  expenditure  as  much  went  for  excursions  as  for 
parks  and  theaters  together.  Three  other  groups  cited  by 
Professor  Chapin,  with  an  average  income  of  $650, 
$748  and  $846  respectively,  spent  a  total  for  recreation 
each  year  of  $3,  $6  and  $7.00.  The  average  annual  ex- 
penditure of  eleven  Fall  River  cotton  mill  families  was 
$36.43.  The  annual  expenditure  for  amusements  by 
twenty-one  southern  cotton  mill  families  was  $22.20. 

The  amount  of  money  left  in  the  average  wage- 
earner's  budget  after  necessities  are  provided  leaves  scant 
funds  for  recreation.  Municipalities  must  choose  be- 
tween a  citizenry  with  the  vitality  and  standards  ex- 
pressed by  these  expenditures  and  a  citizenry  strong  and 
effective  through  play  in  childhood,  wholesome  social 
life  in  young  manhood  and  womanhood,  and  wholesome 
recreation  throughout  adult  life.  The  worker's  contribu- 
tion and  worth  to  society,  and  the  heavy  toll  he  pays  to 
public  expenses  through  taxes  paid  in  rent  certainly  en- 
title him  to  recreational  facilities  furnished  by  himself 
and  his  neighbors  through  the  tax  rate. 

Of  the  $17.34  per  capita  paid  in  1912  in  cities  of  over 
30,000  for  all  governmental  costs,  sixty-four  cents  went 
to  expenditures  for  recreation.  This  per  capita  expen- 
diture of  sixty-four  cents  included  the  total  expenses  of 

(1)  educational  recreation,  which  includes  museums  and 
art  galleries,  zoological  collections,  and  conservatories ; 

(2)  general  recreation,  including  music  and  entertain- 
ments, celebrations,  baths  and  bathing  beaches,  and  ath- 
letics and  playgrounds;    (3)    the  maintenance  of  park 
areas,  including  the  cost  of  policing  and  lighting,  and 
the  care  of  trees  in  streets;  and   (4)   the  operation  of 
quasi-productive  park  enterprises.1     In  addition  to  this, 
twenty-two  cents  per  capita  was  paid  to  libraries.     In 

1  Financial  Statistics  of  Cities  Having  a  Population  of  Over 
30,000:  1912. 


228  LOWER  LIVING  COSTS  IN  CITIES 

the  same  year  the  same  cities  paid  $2.04  per  capita  to 
the  police  department  and  $1.62  to  the  fire  department.1 
The  expenditure  in  smaller  cities  is  under  this  average. 
Of  the  total  payments  of  all  general  governmental  de- 
partments in  cities  of  over  30,000,  3.7  per  cent,  go  to 
recreational  facilities,  as  compared  with  n.8  per  cent,  to 
the  police  departments  and  9.3  per  cent,  to  fire  depart- 
ments. In  the  thirty-three  "cities"  of  Massachusetts 
(their  population  ranges  from  14,000  to  606,000)  the 
per  capita  expenditure  for  recreation  is  eighty-seven 
cents.2 

These  expenditures,  so  inadequate  to  date,  are  hap- 
pily rising  to  a  point  where  wholesome  recreation  may 
yet  be  provided  for  all.  From  1910  to  1912  the  per 
capita  appropriation  for  recreation  in  cities  of  over 
30,000  increased  from  fifty-nine  cents  to  sixty-four 
cents.  In  1903  this  appropriation  averaged  but  thirty- 
four  cents  per  capita. 

Adequate  recreational  facilities  necessitate  extensive 
outlays  in  land,  buildings  and  permanent  equipment.  In 
1912  the  cities  of  over  30,000  spent  $20,729,308  for  this 
purpose,  or  about  I  per  cent,  of  their  total  expendi- 
tures. The  value  of  parks,  playgrounds  and  gardens 
owned  by  cities  of  over  30,000  in  1910  was  $876,823,- 
501 ;  in  1912  it  was  $914,202,571. 

These   general    statements    give   some    idea    of    how 

1The  amount  spent  for  recreation  in  cities  having  a  popula- 
tion of  over  30,000  is  as  follows:  group  I  (over  500,000),  $8,596,- 
911;  group  II  (300,000  to  500,000),  $2,498,258;  group  III  (100,- 
ooo  to  300,000),  $6,947,576;  group  IV  (50,000  to  100,000), 
$1,814,996;  group  V  (30,000  to  50,000),  $871,567. 

*  This  includes  the  following  totals : 

Parks  and  gardens $509,588.52  Memorial  day $27,654.92 

Playgrounds 47,388.52  Fourth  of  July 29,856.58 

Bath  houses 190,710.40  Labor  day 3.3i°-25 

Metropolitan  park  tax ....  812,855-33  Miscellaneous 177,081.28 

"The  Cost  of  Municipal  Government  in  Massachusetts,"  p.  17,  published  in 
1908. 


VITALITY  THROUGH  RECREATION          229 

American  cities  are  trying  to  solve  their  recreation  prob- 
lems. The  plans  and  accomplishments  of  certain  cities 
are  far  ahead  of  others.  Chicago  more  nearly  provides 
adequate  recreational  facilities  than  any  other  one  city. 
Her  expenditures  for  outlays  in  1912  totaled  $3,500,000 
out  of  $180,000,000  expended  for  all  purposes.  More- 
over, such  amounts  as  this  she  has  been  spending  for 
many  years.  Her  per  capita  expenditure  for  recre- 
ation facilities  was  $1.23  in  1912,  as  compared  with  an 
average  of  eighty-seven  cents  for  the  nine  largest  cities 
in  the  United  States.  The  outlay  and  per  capita  expen- 
ditures of  other  cities  in  this  group  reveal  that  they  lag 
far  behind  in  plan  as  well  as  expenditures.  Thus  Phila- 
delphia's expenditures  for  outlays  were  less  than  $i,- 
000,000  per  annum  and  her  per  capita  expenditure  but 
fifty-eight  cents.  New  York  City,  with  a  far  larger 
population,  spent  but  one-third  of  Chicago's  sum  for 
outlays,  while  her  expenditures  totaled  but  81  cents  per 
capita.  Boston,  one  of  the  nine  largest  cities,  spent  in 
1912  $650,000  for  outlays  and  $1.88  per  capita.  Denver, 
Colorado,  is  undertaking  heavy  expenditures,  though 
these  are  all  too  largely  for  "civic  beauty"  and  for  the 
purpose  of  attracting  tourists  rather  than  for  recreational 
utility  for  the  city's  earners. 

The  cost  of  the  different  types  of  recreation  reveals 
even  more  clearly  than  these  general  statements  at  what 
small  individual  cost  recreation  can  be  provided,  when 
provided  cooperatively  at  public  expense.  The  Board 
of  Education  of  Philadelphia  conducted  ninety-one 
school  yards  as  playgrounds  during  July  and  August  of 
1912  at  a  cost  of  $416.17  per  playground  and  at  a  per 
capita  cost  for  each  time  a  child  used  the  playground 
of  about  four  cents,  the  attendance  being  922,622.  Ten 
swimming  centers  were  conducted  by  this  same  board 
at  an  average  cost  of  $155.26  per  center.  Nine  school 


230  LOWER  LIVING  COSTS  IN  CITIES 

gardens  and  6,295  home  gardens  were  conducted  at  an 
average  cost  of  $802.84  and  twenty-six  and  one-half 
cents  respectively.  During  the  year  1912  the  attendance 
at  thirteen  supervised  municipal  playgrounds,  other  than 
school  grounds,  in  Philadelphia  was  1,371,315,  and  the 
cost  of  operation  per  child  was  slightly  over  four  cents, 
the  total  money  cost  of  operation  being  but  $57,149.40. 
So  late  as  1906  Philadelphia  had  no  municipal  play- 
grounds. The  West  Side  park  commissioners  in  Chi- 
cago conducted  fifty-seven  band  concerts  in  nine  differ- 
ent small  parks  at  a  total  cost  of  $7,235.  The  South 
Side  commissioners  operated  eleven  swimming  pools  in 
1912  at  an  average  cost  of  three  cents  per  bather.1  This 
cost  includes  all  charges  made  against  the  swimming 
pool  account,  such  as  salaries  of  life  guards,  attendants 
and  janitors,  cost  of  soap  and  laundry,  and  the  yearly 
expenditure  for  towels,  bathing  suits,  heating  and  light- 
ing.2 

Do  these  expenditures  pay? 

This  question  can  be  answered  by  a  casual  glance 
at  the  varied  program  offered  in  typical  summer  and 
winter  weeks  in  Philadelphia's  recreation  parks,  and  by 
a  quotation  as  to  the  results  observed  by  the  South  Park 
commissioners  of  Chicago. 

A  TYPICAL  SUMMER  WEEK  IN  A  RECREATION  PARK 
IN  PHILADELPHIA 

9.00  to  9.30  A.M. — Flag  raising,  patriotic  songs. 

10.00  to  ii.oo  A.M. — Supervised   gymnastics   in   the   open   air. 

For  older  boys  and  girls,  Monday,  Wednesday,  Saturday. 

For  younger  children  on  Tuesday,  Thursday  and  Friday. 

*The  total  attendance  was  632,025  and  the  total  cost  was 
$18,895. 

1  "Annual  Report  of  the  South  Park  Commissioners  for  the 
Year  Ending  February  28,  1912." 


VITALITY  THROUGH  RECREATION          231 

11.00  A.M.  to  12.00  M. — Basket  weaving,  raffia,  singing,  games. 
On  another  part  of  the  field:  running,  jumping  and  general 
track  and  field  sports. 

2.00  to  2.30  P.M. — Stories  and  songs. 

2.30  to  3.00  P.M. — Open  air  gymnastics  for  younger  boys  and 
girls  on  Monday,  Wednesday  and  Friday.  For  older  boys  and 
girls  on  Tuesday,  Thursday  and  Saturday. 

3.00  to  3.45  P.M. — Games  of  low  organization. 

3.45  to  4.30  P.M. — Track  and  field  events,  such  as  running,  jump- 
ing, etc. 

4.30  to  5.15  P.M. — Games  of  high  organization. 

5.15  to  6.00  P.M. — Occupation  work,  also  team  games. 

GENERAL  ACTIVITIES 

Other  organized  games  are  played  simultaneously  with  the 
preceding  activities.  Baseball  with  a  soft  ball  is  always  a  favorite. 

When  school  is  not  in  session  the  playgrounds  are  open  from 
9  A.  M.  to  10  P.  M.,  June  i5th  to  September  8th.  Each  ground  has 
an  elastic  and  varying  program. 

All  Recreation  Parks  have  leagues  of  Boys'  Clubs  which  play 
championship  series  throughout  the  summer.  A  number  of  excel- 
lent team  games,  such  as  Captain  Ball,  Volley  Ball,  End  Ball, 
Prisoners'  Base,  etc.,  have  been  introduced  and  have  supplanted 
the  old  street  games  in  the  hearts  of  the  players.  A  child  dropping 
in  at  almost  any  hour  may  find  a  game  going  on.  For  children 
under  six  the  wading  pool,  sand  beach  and  swings  are  an  unweary- 
ing paradise. 

A  TYPICAL  WINTER  WEEK  IN  A  RECREATION  PARK 

IN  PHILADELPHIA1 

3.45  to  4.30. P.M. — Gymnastic  classes  indoors  for  boys  and  girls 
grouped  as  to  age — every  day.  The  large  classes  are  sub- 
divided under  assistants. 

4.30  to  5.30  P.M. — A  variety  of  games — athletic  and  quiet. 

1  October  isth  to  April  isth.  While  school  is  in  session. 
Grounds  closed  during  school  hours.  Grounds  open  3.45  P.  M., 
except  Saturday,  9  A.  M.,  closed  at  10  P.  M. 

The  winter  attendance  is  very  large.  Nearly  all  summer 
activities  are  conducted  out-of-doors  during  open  winter  weather, 
and  the  recreation  buildings  are  fully  utilized  at  night  and  in  bad 
weather. 


232  LOWER  LIVING  COSTS  IN  CITIES 

5.30  to  6.00  P.M. — Running,  jumping,  sports,  etc.,  ending  with 

shower  bath. 
7.00  to  10.00  P.M. — Games,  clubs,  dancing,  entertainments. 

The  South  Park  Commissioners  of  Chicago  in  their 
report  for  the  fiscal  year  1913,  state  that  their  park  cen- 
ters have  justified  their  expense  by  the  following  results : 

"i.  There  is  a  bettering  of  community  morals;  low  dance  halls 
disappear  from  their  vicinity;  poolroom  hang-outs  for  young 
loafers  decrease  in  number;  better  social  practices  develop  among 
the  people. 

"2.  Health  conditions  improve;  regular  exercise  and  bathing 
inculcate  right  living;  health  talks  give  personal  knowledge  to 
individuals;  instruction  to  mothers  in  caring  for  infants  decreases 
infant  mortality;  community  betterment  associations  fight  for 
better  sewage  and  general  sanitation;  the  breathing  places  relieve 
in  hot  weather. 

"3.  Juvenile  delinquency  is  decreased  and  reformation  made 
easier. 

"4.  A  conscious  community  spirit  is  developed. 

"5.  Community  expression  through  music,  dramatics  and 
festivals  is  made  possible. 

"6.  The  joy  and  value  of  wholesome  play  are  given  to  thousands 
of  children  who  would  otherwise  grow  up  without  its  needed 
influence." 

ELEMENTS  IN  A  CONSTRUCTIVE  PROGRAM 

Adequate  recreational  facilities  at  minimum  costs  re- 
quire the  full  utilization  of  neighborhood  centers,  social 
settlements,  churches,  public  armories,  and  the  school 
plant,  and  the  efficient  coordination  of  all  recreational 
institutions  and  activities.  More  particularly  it  requires 
that  land  be  early  set  aside  for  playgrounds,  recreational 
centers  and  parks. 

Land  for  recreational  purposes  costs  most  where  most 
needed.  The  larger  the  city,  the  denser  the  popula- 
tion, and  the  greater  the  social  need,  the  higher  is  the 
cost  of  lands  requisite  for  adequate  playgrounds  and 
parks.  Thus  'in  Philadelphia,  where  land  values  are 


VITALITY  THROUGH  RECREATION          233 

lower  than  in  many  other  cities,  the  cost  or  value  of  one 
site  of  one  and  one-half  acres  was  $232,000,  of  another 
tract  of  two  and  one-half  acres  $38,000,  a  plot  of  seven- 
tenths  of  an  acre  cost  $91,960,  while  the  value  of  a  five- 
acre  playground  was  $139,000.  The  land  assets  of  the 
South  Park  commissioners  of  Chicago  totaled  in  1912 
$6,230,000.  The  bonded  indebtedness  of  the  West  Side 
Chicago  park  commissioners  in  1912  was  $4,300,000, 
most  of  which  was  for  land  values.  The  areas  and  land 
costs  for  certain  small  parks  in  Chicago  are  given  in  the 
following  table: 

Name  of  Park  Acres  Cost  of  Land 

Bernard  A.  Eckhart  Park 8  $281,926.41 

Stanford  Park 2 . 89  197,591.0x5 

Dvorak  Park 3.75  83,873.62 

Franklin  Park 8 . 26  35,000.00 

Pulaski  Park 3.2  450,508.00 

Harrison  Park 8 . 24  290,000.00 

These  land  costs  make  adequate  recreational  facili- 
ties for  a  city  of  any  size  almost  impossible  within  rea- 
sonable time.  One  remedy,  effective  abroad,  and  which 
may  be  used  in  the  United  States,  though  in  many  states 
constitutional  amendments  would  be  necessary,  is  to  re- 
quire the  dedication  to  the  public  use,  in  all  new  addi- 
tions to  the  city,  of  a  certain  proportion  of  the  land, 
to  be  used  for  playgrounds  and  parks.  This  can  as 
reasonably  be  required  as  roads,  streets  and  alleys.  Plan- 
ning commissions  with  compulsory  powers  can  well  see 
that  such  provisions  are  made;  and  cities  without  ade- 
quate powers  can,  through  publicity  and  request,  go 
far  toward  securing  the  desired  ends.  The  only  remedy 
for  sections  already  crowded  is  the  purchase  of  lands  at 
the  earliest  possible  date. 

Self-government  in  social  and  neighborhood  centers 
will  not  only  lower  costs  through  the  utilization  of  volun- 


234  LOWER  LIVING  COSTS  IN  CITIES 

tary  committees,  but  will  also  make  those  centers  more 
effective.  The  morality  of  the  twentieth  century  must 
have  its  foundations  in  self-control  to  the  end  that  the 
habits  and  appetites  of  individuals  shall  conform  to  the 
interests  of  public  welfare.  Censorship  and  ostracism, 
the  controlling  forces  in  nineteenth  century  rural  moral- 
ity, must  give  way  to  self-control  for  the  larger  good. 
The  value  of  self-government  in  attaining  these  ends 
has  already  been  exemplified  not  only  in  such  schools 
as  the  Allan  Dale  School  and  the  George  Junior  Re- 
public, but  also  in  the  administration  of  recreation  cen- 
ters in  Chicago  and  of  neighborhood  activities  in 
churches.  For  the  administration  of  assembly  halls,  for 
the  supervision  of  dances  and  play  festivals,  for  equip- 
ment and  certain  expenses,  local  committees  can  be  put 
in  complete  control  to  the  monetary  and  social  advan- 
tage of  all. 

As  a  rule  social  settlements  and  neighborhood  houses 
are  utilized  as  recreation  centers  about  up  to  their  ca- 
pacity. Social  settlements  grew  out  of  the  desire  to 
escape  from  the  limitations  of  the  upper  classes  and 
out  of  the  growing  sense,  on  the  part  of  the  educated 
and  wealthier  classes,  of  social  responsibility  for  the 
economic  and  social  maladjustment  of  the  times.  These 
settlements  have  invariably  begun  their  work  with  chil- 
dren, and  have  reached  out  from  recreational  facilities 
to  other  social,  educational,  humanitarian  and  civic  work. 
These  were  the  first  institutions  to  give  opportunity 
for  normal  recreation,  or  indeed  recreation  of  any  kind 
outside  of  the  saloon  and  the  public  dance  hall. 

In  every  city  and  community  untold  thousands  of  dol- 
lars are  invested  in  church  buildings  and  plants  which 
are  used  to  but  a  small  per  cent,  of  their  possibilities. 
These  buildings  are  being,  and  can  be,  utilized  for  clubs 
and  in  vitalizing  social  activities. 


VITALITY  THROUGH  RECREATION          235 

According  to  the  "Financial  Statistics  of  Cities  for 
1912,"  $604,394,759  is  invested  in  schools  in  cities  hav- 
ing a  population  of  over  30,000.  These  buildings  and 
grounds  are  used  to  not  more  than  50  per  cent,  of  their 
possible  efficiency.  To  attain  educational  efficiency 
school  buildings  are  located  just  where  they  can  be  most 
effective  as  recreation  centers.  To  them  the  children 
are  accustomed  to  come;  and  few  are  the  social,  reli- 
gious or  racial  prejudices  against  them  that  have  not 
already  been  overthrown.  The  symbol  of  democracy  in 
education,  they  can,  with  a  slight  change  in  plan  and  in 
the  attitude  of  school  boards,  become  the  symbol  of 
democracy  in  recreation  as  well.  The  loss  to  New  York 
City  alone  through  failure  to  use  its  school  facilities 
for  out-of-school-time  recreation  has  been  estimated  at 
$2,500,000  per  year.1  In  the  500  schools  in  New  York 
City  there  are  invested  $122,000,000;  in  the  schools  of 
all  cities  over  30,000  $604,000,000.  On  the  basis  of  the 
estimated  loss  in  New  York  City,  the  loss  to  cities  over 
30,000  would  be  $12,500,000.  Taking  into  considera- 
tion the  cities  under  30,000  the  annual  loss  is  certainly 
over  $15,000,000.  Our  cities  can  avail  themselves  of  this 
amount  by  utilizing  their  school  plants  for  recreation 
centers. 

And,  finally,  efficient  utilization  of  the  various  recrea- 
tional facilities  offered  in  school  buildings,  social  settle- 
ments, churches,  public  armories,  recreation  centers,  in 
playgrounds,  public  parks  and  buildings  and  on  school 
athletic  grounds,  requires  a  coordination  of  effort  among 
all  of  these  agencies  to  the  end  that  overhead  charges, 
janitor  fees,  heat  and  lighting  and  other  costs  may  be 
reduced  to  a  minimum,  and  to  the  end  that  all  these 

1  Interim  Report  of  Committees  on  School  Inquiry,  Board  of 
Estimates  ajid  Apportionment,  City  of  New  York,  1912-1913, 
P-  52. 


236  LOWER  LIVING  COSTS  IN  CITIES 

facilities  may  be  fully  utilized.  Through  such  coordi- 
nation and  cooperation  all  the  recreational  facilities  of 
every  community  can  be  used  to  their  maximum  ef- 
ficiency. 

Social  foresight  and  collective  expenditures,  coupled 
with  individual  initiative  and  a  democratic  spirit,  can 
give  recreational  facilities  to  all  city  dwellers,  to  the 
definite  enhancement  of  their  happiness,  well-being,  vi- 
tality and  earning  power. 


CHAPTER   XVI 

ELEMENTS   IN   A   CONSTRUCTIVE   HOUSING 
PROGRAM 

The  housing  problem  is  a  pertinent  question  to  100 
per  cent,  of  our  population ;  to  80  per  cent,  of  our  urban 
population  it  is  a  menacing  question,  menacing  because 
so  closely  related  to  health  or  ill-health,  to  moral  growth 
or  decay,  to  proximity  or  non-proximity  to  employment, 
and  to  the  adequacy  or  inadequacy  of  the  family  income 
after  the  rental  costs  have  been  paid.  Housing  condi- 
tions in  growing  cities,  even  at  the  best,  are  ever  in  the 
process  of  being  solved.  They  are  never  solved.  It  is 
the  rapid  growth,  past  and  prospective,  in  American 
cities  that  makes  the  question  of  housing  costs  pertinent 
to  urban  stability. 

In  Chapter  I  some  of  the  facts  as  to  the  growth  of 
the  urban  population  in  the  United  States,  particularly 
during  the  last  decade,  have  been  recounted.  It  was  not 
pointed  out,  however,  that  practically  one-fifth  of  our 
total  population  (18.59  per  cent,  to  be  exact)  is  con- 
centrated in  metropolitan  cities  covering  only  one-for- 
tieth of  our  land  area  ;*  while  30  per  cent,  of  our  popu- 
lation (29.76  per  cent.)  living  in  cities  of  over  30,000 
are  centered  on  land  area  equal  to  but  12  per  cent,  of 
the  total  land  area  in  the  United  States. 

The  land  area  of  the  United  States  is  sufficient  to  allow 
each  person  over  twenty  acres  each.  Yet  nearly  one- 

1The  area  of  metropolitan  cities  is  1,185,796  acres,  or  .026 
per  cent,  of  the  1,903,289,600  acres  in  the  United  States. 

237 


238  LOWER  LIVING  COSTS  IN  CITIES 

third  of  our  population  live  on  the  average  of  about 
twelve  to  the  acre.  There  are  in  the  United  States  as 
a  whole  5.2  persons  per  dwelling.  In  the  urban  states 
the  average  is  6.1  (6  in  the  New  England  states  and 
6.2  in  the  Middle  Atlantic  states),  as  compared  with  4.9 
in  the  other  sections. 

General  averages  as  to  the  number  of  people  per 
acre  in  no  wise  express  the  amount  of  actual  congestion 
in  cities,  for  the  very  simple  reason  that  urban  districts 
include  many  homes  surrounded  by  a  large  acreage  as  also 
a  large  percentage  of  undeveloped  land  held  by  specu- 
lators for  a  rise  in  price.  Housing  congestion  is  fur- 
ther necessitated  in  practically  all  American  cities  because 
of  the  inexcusable  concentration  of  industrial  plants  in 
restricted  areas  so  that  the  earning  people,  to  save  ex- 
pense and  time  in  reaching  their  work,  naturally  tend  to 
crowd  together  in  relatively  small  portions  of  the  city. 

Over  two-thirds  of  the  people  of  New  York  City  live 
in  multiple  dwellings,  including  over  100,000  separate 
tenements,  one-tenth  of  which  are  of  the  hopeless  and 
discredited  dumb  bell  type.  Three  million  of  these  peo- 
ple, reported  Mr.  Lawrence  Veiller,  in  his  book  on 
"Housing  Reform,"  published  in  1910,  are  living  in 
80,000  buildings  "so  constructed  as  to  be  a  standing 
menace  to  the  community  in  the  event  of  fire,  most  of 
them  built  with  wooden  stairs,  wooden  halls  and  wooden 
floors,  and  thousands  built  entirely  of  wood."  "In  one 
small  portion  of  Manhattan  Island,  the  district  south  of 
Fourteenth  Street  and  east  of  Broadway,  dwell  over 
500,000  human  beings,  a  population  in  itself  greater 
than  the  entire  population  of  any  other  American  city 
except  Chicago,  Philadelphia,  St.  Louis,  Boston  and  Bal- 
timore; a  population  greater,  indeed,  than  the  popula- 
tion of  each  of  the  following  states :  Arizona,  Delaware, 
Idaho,  Montana,  Nevada,  North  Dakota,  Oregon,  New 


A  CONSTRUCTIVE  HOUSING  PROGRAM      239 

Hampshire,  New  Mexico,  Rhode  Island,  Utah,  Vermont, 
and  Wyoming." 

Mr.  Veiller  also  points  out  that  "Over  a  million  peo- 
ple have  no  bathing  facilities  in  their  homes ;  while  even 
a  greater  number  are  limited  to  the  use  of  sanitary  con- 
veniences in  common  with  other  families,  without  proper 
privacy;  over  a  quarter  of  a  million  people  had  in  the 
year  1900  no  other  sanitary  conveniences  than  anti- 
quated yard  privies;  and  even  to-day  2,000  of  these 
privy  sinks  still  remain,  many  of  them  located  in  dense- 
ly populated  districts,  a  source  of  danger  to  all  in 
the  neighborhood,  facilitating  the  spread  of  contagious 
disease  through  the  medium  of  the  common  house- 

%." 

Nor  is  such  congestion  typical  of  large  cities  only.  In 
Washington,  D.  Q,  some  11,000  persons  live  in  alleys 
under  conditions  of  health  and  morality  that  are  a  dis- 
grace to  the  national  capital. 

But  mere  elimination  of  congestion  is  by  no  means 
the  consideration  of  first  importance  in  assuring  adequate 
housing  facilities.  Conditions  of  living,  access  to  fresh 
air  and  recreation  centers,  accessibility  to  steady  em- 
ployment, the  number  of  persons  per  room,  the  amount 
of  sunlight,  the  character  and  extent  of  sanitary  condi- 
tions, rental  costs,  in  short,  the  effect  of  housing  condi- 
tions on  productivity  and  upon  moral,  social  and  physical 
well-being — these  are  the  tests  of  the  adequacy  and  jus- 
tice of  a  city's  housing  conditions  and  facilities.  Judged 
by  these  tests,  the  shanties  in  the  less  populated  districts 
along  the  river  in  Kansas  City,  Missouri,  or  along  cer- 
tain railroad  tracks  in  Denver,  or  in  the  small  mining 
towns  of  Colorado  and  Pennsylvania,  offer  more  serious 
housing  problems  than  do  the  congested  districts  of  large 
cities  in  which  there  are  monster,  yet  properly  con- 
structed, apartment  houses. 


240  LOWER  LIVING  COSTS  IN  CITIES 


THE  COST  OF  POOR  HOUSING  CONDITIONS 

The  high  death  rate  from  tuberculosis  in  the  crowded 
alleys  in  Washington,  D.  C,  causes  not  only  a  drain 
upon  the  industrial  resources  of  that  city  through  the 
death  rate  and  incapacity  of  the  workers  in  that  par- 
ticular section,  but  is  an  ever-present  menace  to  all  the 
inhabitants  of  the  city.  This  condition  accounts  in  large 
measure,  no  doubt,  for  the  fact  that  only  nine  of  the  fifty 
largest  cities  in  the  United  States  have  a  higher  death 
rate  than  does  our  national  capital. 

The  Municipal  Journal  of  March  13,  1914,  published 
in  London,  contains  a  statistical  study  showing  the  re- 
lation between  mortality  and  overcrowding  and  other 
housing  conditions :  "In  England  and  Wales,  as  we  have 
already  seen,  we  are  met  by  the  perplexing  fact  that, 
excluding  London,  we  have  a  population  of  3,139,472 
persons  occupying  some  430,910  overcrowded  tenements  ; 
and  we  find  that,  taking  the  country  as  a  whole,  there 
are  upward  of  9  per  cent,  of  the  private  population  liv- 
ing under  overcrowded  and  unwholesome  conditions. 

"From  this  general  outline  of  the  extent  of  the  over- 
crowded tenement  problem  we  now  proceed  to  examine 
the  price  paid  in  human  lives  for  this  trespass  upon  the 
limits  set  up  and  demanded  by  Nature  for  the  main- 
tenance of  a  proper  standard  of  general  health  and  lon- 
gevity. We  learn  from  the  official  mortality  returns 
that  this  general  death  rate  in  single-roomed  tenements 
is  32.7  per  1,000.  In  the  case  of  two-roomed  tenements 
the  death  rate  drops  down. to  21.3,  a  difference  of  11.4 
as  between  the  one-  and  two-roomed  tenement.  If  we 
take  the  three-roomed  death  rate  we  get  13.7,  but  when 
we  arrive  at  the  luxury  of  a  four-roomed  tenement  we 
get  our  death  rate  down  to  an  average  of  11.2. 


A  CONSTRUCTIVE  HOUSING  PROGRAM      241 

"These  figures  are  startling,  and  prove  that  there  is 
nearly  300  per  cent.,  or  say  about  three  times  a  greater 
chance  of  life  in  the  four  rooms  as  against  the  one-room 
tenement,  and  it  has,  in  fact,  been  conclusively  proved 
by  the  examination  of  official  statistics  that,  in  a  gen- 
eral way,  it  is  immaterial  what  part  of  a  town  or  city 
one  may  take  for  the  purpose  of  analysis  it  will  be 
found  that  the  single-room  death  rate  is  usually  a 
third  higher,  and  invariably  higher  by  anything  from 
9  to  1 6  per  1,000,  than  is  the  death  rate  for  the 
remainder  of  the  ward  or  of  the  city  as  a 
whole."  x 

In  the  shacks  and  hovels  of  Kansas  City,  Missouri,  the 
infant  mortality  is  five  to  seven  times  that  of  other  dis- 
tricts. A  study  of  two  contrasted  districts  in  Cleve- 
land showed  that,  in  the  first,  made  up  mostly  of  com- 
paratively new  houses,  practically  all  of  which  were 
maintained  in  a  sanitary  condition,  the  death  rate  from 
tuberculosis  was  28  per  thousand,  as  compared  with  a 
death  rate  in  the  second  district,  where  rents  were  no 
higher  but  where  the  houses  were  old  and  insanitary, 
of  about  52  per  thousand.  In  the  first  district  the  num- 
ber of  contagious  diseases  was  three  per  thousand,  as 
compared  with  an  average  of  18  per  thousand  in  the 
second  district.  In  Edgbaston,  one  of  the  suburban 
sections  of  Birmingham,  England,  the  general  death  rate 
is  13.1,  as  compared  with  a  death  rate  of  31.5  in  the 
overcrowded  Floodgate  area  in  the  middle  of  the  city. 
The  weight  and  stature  of  boys  and  girls  of  a  given 
age,  according  to  a  study  made  in  Glasgow  of  72,857 
school  children  belonging  to  families  living  in  one,  two, 
three  or  four  rooms  respectively,  varied  directly  with 
the  number  of  rooms  occupied  by  their  families.  Fur- 
ther statistics  are  not  needed  to  reveal  that  for  care- 

*"The  Municipal  Journal,"  London,  March  13,  1914,  p.  321. 


242  LOWER  LIVING  COSTS  IN  CITIES 

lessness  in  housing  the  city  pays  heavily  in  its  toll  of 
death,  disease  and  physical  incapacity. 

It  does  not  follow,  to  be  sure,  that  a  density  of  4,000 
per  acre  means,  ipso  facto,  a  death  rate  ten  times  as 
great  as  a  density  of  400  per  acre.  A  modern,  sanitary 
apartment,  surrounded  by  open  spaces,  with  an  interior 
yard  of  such  proportions  and  arrangements  as  will  give 
adequate  sunlight  to  every  living  room,  may  be  more 
healthful  for  housing  purposes  than  a  dozen  shanties  on 
a  country  lane  with  improper  sanitary  improvements  and 
surroundings,  or  than  a  block  of  two-story  houses  in 
Philadelphia  where,  as  is  still  occasionally  the  case,  the 
only  sewer  is  the  open  street. 

But  the  big  fact  is  that  housing  conditions  and  physi- 
cal fitness  are  so  closely  related  that  no  city  interested 
in  its  productive  powers,  its  future  welfare  or  living 
costs  dare  ignore  them.  If  to  the  low  rents  paid  under 
improper  housing  conditions  were  added  the  amounts 
paid  by  the  taxpayer  for  regulative,  remedial  and  puni- 
tive institutions,  it  would  be  seen  that  the  rents,  thus 
made  up  in  part  out  of  the  taxpayer's  pocket,  were  ac- 
tually higher  than  under  wholesome  conditions. 

One-half  the  children  born  to  colored  mothers,  resi- 
dent in  the  congested  alleys  of  Washington,  D.  C.,  are 
illegitimate,  as  compared  to  the  illegitimacy  of  one-fifth 
of  the  children  born  to  colored  mothers  resident  in 
houses  facing  the  streets.  The  total  rate  of  illegitimacy 
in  the  city  as  a  whole  is  10.3  per  cent.  Propinquity 
without  privacy  means  immorality.  From  out  of  poor 
housing  conditions  spread  vice  and  degraded  morals 
just  as  surely  as  from  out  of  such  conditions  spread 
death  and  debility.  Normal  living  costs  to  all  are  in- 
separable from  normal  housing  costs  for  all ;  and  a  virile 
morality  can  spring  only  from  wholesome  homes. 

Poor  housing  conditions  lead  inevitably  to  the  sweat 


A  CONSTRUCTIVE  HOUSING  PROGRAM      243 

shop  and  sweat  shop  prices.  For  poor  housing  condi- 
tions mean  low  standards  and  low  standards  mean  low 
wages.  A  dilapidated  house  betokens  a  dilapidated  earn- 
ing power,  and  the  former  is  as  much  the  cause  as  the 
result  of  the  latter.  The  nation  that  wants  a  lower 
class  of  incompetents  and  inadequates  need  but  per- 
petuate the  housing  conditions  of  incompetents  and  in- 
adequates; and,  conversely,  capable,  independent  earn- 
ing power  can  come  only  out  of  an  environment  that 
of  itself  inculcates  such  standards.  Better  housing  con- 
ditions mean  better  standards  and  better  standards  mean 
better  wages. 

HOUSING  COSTS 

As  is  the  city's  earning  class,  so  is  the  city.  If  this 
be  accepted  as  sound  doctrine,  then  the  city  must  in- 
terest itself  in  what  the  earner's  rent  money  buys.  For 
wages  are  increased  when  their  purchasing  power  is  in- 
creased. What  the  money  wage  of  the  laborer  is  is  not 
so  important  as  what  that  money  wage  can  buy.  There 
are  then  two  vital  questions :  ( I )  what  does  the  average 
wage-earner  pay  for  rent,  and  (2)  what  does  that  rental 
money  buy  him?  "Rent  is  the  price  one  pays  for  the 
shelter  he  gets,  plus  the  conveniences  that  aid  healthy 
living,  produce  economic  efficiency,  and  facilitate  whole- 
some sociability."  * 

Only  one  out  of  every  five  of  the  residents  of  the 
larger  cities  own  their  own  homes.  But  these  very  home 
owners  are  often  paying  unnecessarily  high  costs  for 
their  housing  facilities.  The  better  residence  districts, 
to  be  sure,  are  well  planned,  well  supplied  with  public 

1  Bernard  J.  Newman :  "Congestion  and  Rents,"  The  Annals 
of  the  American  Academy  of  Political  and  Social  Science,  Janu- 
ary, 1914,  p.  60. 


244  LOWER  LIVING  COSTS  IN  CITIES 

utilities  and  thoroughly  restricted  so  that  the  well-to-do 
purchaser  gets  his  money's  worth.  "The  location  of 
outbuildings ;  the  fronting  of  residences ;  the  exclusion 
or  control  of  business  property  and  other  injurious  sur- 
roundings; the  elimination  of  billboards;  provision  of 
free  space  between  the  houses  for  air  and  sunshine ; 
the  establishing  of  building  lines;  provision  of  more 
room  for  garden,  grass,  trees,  flowers  and  shrubbery; 
the  perpetuation  of  restrictions;  abandonment  of  the 
obsolete  alley;  requiring  of  minimum  costs  of  resi- 
dences in  the  varying  sections,  and  frequently  the  con- 
trol of  the  architectural  design  and  exterior  color  scheme 
of  the  residence,  as  well  as  the  grading  plans  of  the  lot, 
are  carefully  thought  out  and  made  a  requirement  in 
every  part  of  the  development."  1  But  such  is  not  the 
case  with  the  modest  city  home  owner. 

"In  every  American  city  to-day,"  as  has  been  pointed 
out  by  Mr.  J.  C.  Nichols,  "the  poor  man  in  reality  buys 
the  highest  priced  property  on  the  market.  He  usually 
buys  his  property  absolutely  unimproved,  seldom  with 
even  the  street  brought  to  grade.  Frequently  his  water 
mains  are  inadequate  in  size,  simply  being  small  pipes 
laid  by  the  aggressive  real  estate  owner,  merely  large 
enough  to  enable  him  to  advertise  'city  water.' 

"This  property  is  ordinarily  sold  without  any  build- 
ing restrictions  as  to  the  use  of  the  property.  Livery 
stables,  laundries,  undertaking  establishments,  coal  yards, 
slaughter-houses,  breweries,  stone  quarries,  foundries, 
hospitals  and  factories  of  all  descriptions  may  be  lo- 
cated on  the  adjoining  tracts.  A  neighbor  may  decide 
to  face  his  house  on  the  other  street  and  place  his  foul 
smelling  barn  and  his  pile  of  manure  immediately  ad- 

1].  C.  Nichols:  "Housing  and  the  Real  Estate  Problem," 
The  Annals  of  the  American  Academy  of  Political  and  Social 
Science,  January,  1914,  p.  132. 


A  CONSTRUCTIVE  HOUSING  PROGRAM      245 

joining  the  laborer's  modest  home.  Frequently  this  lit- 
tle home  may  find  itself  lined  with  privies  on  either 
boundary  line. 

"The  lot  may  be  so  narrow  that  the  sun  may  never 
shine  between  the  homes.  The  lot  may  be  so  small  that 
the  children  of  this  workingman  may  rarely  have  the 
joy  of  grass,  flowers,  gardens,  trees,  or  shrubbery  upon 
their  lot,  while  this  is  the  particular  class  that,  from 
economical  reasons  alone,  should  have  the  garden  op- 
portunity for  at  least  growing  vegetables  for  their  own 
daily  use. 

"Probably  no  provision  has  been  made  at  the  time  of 
platting  the  ground  for  any  public  playgrounds  in  that 
section  of  the  city;  and  the  only  possible  way  that  they 
may  be  later  secured  is  for  the  playground  or  park  com- 
mission of  the  city  to  condemn  a  section  of  this  dearly 
bought  property  and  assess  the  costs  to  these  already 
burdened  lot  or  home  buyers. 

"Real  estate  dealers  and  owners  of  to-day  are  not  alone 
responsible  for  this  condition.  It  has  become  the  es- 
tablished custom  in  most  cities  and  there  has  been  little 
evidence  of  public  sentiment  to  the  contrary  against  it, 
and  this  class  of  buyer  will  require  considerable  educa- 
tion along  these  lines.  Certainly,  however,  many  of 
the  safeguards  given  the  better  residence  property  could" 
be  given  in  the  same  degree  in  proportion  to  the  laboring 
men's  homes."  * 

According  to  the  census  of  1900  but  46  per  cent,  of 
all  the  families  in  the  United  States  owned  their  own 
homes,  and  half  of  these  homes  were  mortgaged.  These 
ratios  include  rural  dwellers.  From  three-fourths  to 
four-fifths  of  urban  dwellers  are  home  renters.  They 
must  adapt  themselves  to  what  is  provided  for  them  by 
some  landlord  whose  sole  interest  is  a  maximum  return 

llbid.,  pp.  I34-3& 


246  LOWER  LIVING  COSTS  IN  CITIES 

on  a  minimum  investment.  The  result  is  that  the  poorer 
classes — and  this  is  always  the  case  where  there  is  no 
public  regulation  and  restriction,  and  it  is  the  case  to 
a  large  extent  even  with  such  regulation  and  restriction — 
are  paying  relatively  more  for  what  they  get  than  does 
any  other  class. 

How  are  housing  costs  to  be  kept  at  a  minimum  ?  And 
how  can  a  community  make  sure  that  its  citizenry  are 
getting  full  value  from  housing  expenditures,  measured 
not  only  in  terms  of  rooms,  but  in  healthful,  moral  and 
comfortable  living  conditions? 


MINIMUM  HOUSING  COSTS 

The  factors  that  determine  housing  costs  and  the  ade- 
quacy of  returns  for  those  costs  are:  (i)  accessibility 
to  steady  employment;  (2)  accessibility  to  educational, 
social  and  recreational  centers;  (3)  sewage,  water, 
lighting,  transit  and  other  utility  facilities;  (4)  the 
building  restrictions  and  regulations  as  to  the  use  to 
which  such  residence  properties  can  be  put;  (5)  the  type* 
and  facilities  of  the  building,  including  air,  light,  sani- 
tary conditions,  fire  protection,  etc. ;  (6)  the  cost  of 
building  materials,  including  financing  and  banking  costs, 
legal  service,  promotive,  engineering,  and  architectural 
cosfs,  and  the  cost  of  skilled  and  unskilled  labor;  (7) 
the  plan  and  construction  of  the  house  so  as  to  give  ade- 
quate fire  protection  and  fire  prevention  at  minimum 
maintenance  costs;  (8)  the  cost  of  the  land. 

Such  are  the  main  elements  entering  into  housing 
costs.  How  can  maximum  housing  advantages  and  fa- 
cilities be  assured  at  minimum  costs? 

The  avenues  and  agencies  through  which  adequate 
housing  programs  have  been  and  can  be  realized  are : 


A  CONSTRUCTIVE  HOUSING  PROGRAM      247 

(i)  efficient  housing  regulation  and  adequate  public  su- 
pervision; (2)  housing  ownership  and  operation  by  the 
public  authorities;  (3)  public  control  of  land  values 
through  land  ownership  and  land  taxation;  (4)  proper 
town  planning,  including  transit  and  other  utility  facili- 
ties, with  costs  shorn  of  watered  stock  and  other  im- 
aginary values;  (5)  an  industrial  readjustment  that  will 
minimize  non-employment  and  further  the  movement 
toward  decentralization  in  urban  populations;  (6)  en- 
couragement of  home  ownership  through  cooperative 
organizations  and  minimum  building  costs. 

Philanthropic  movements  and  organizations  were  not 
named  as  one  of  the  avenues  and  agencies  through  which 
permanent  .housing  results  can  be  secured.  To  be  sure, 
individuals  and  organizations  with  philanthropic  motives 
may  assure  the  erection  of  model  tenements,  and  con- 
tribute in  other  ways  toward  ameliorating  conditions. 
The  Octavia  Hill  Association  of  Philadelphia,  which 
now  owns  143  houses  for  192  families  and  controls,  as 
agent,  more  than  209  houses  for  432  families — a  total  of 
624  families  in  property  worth  about  $700,000,  has 
demonstrated  that  builders  can,  with  profit,  erect  good 
homes  in  Philadelphia  at  a  rental  of  thirteen  dollars 
per  month.  Paternalistic  and  quasi-philanthropic  in- 
dustrial villages  have  been  built,  such  as  Gary,  Pullman, 
and  Fairfield,  and  housing  plans  have  been  made  by  the 
United  States  Steel  Corporation  at  its  new  plant  at 
Duluth,  by  the  Goodrich  Tire  and  Rubber  Company  at 
Akron,  and  by  the  American  Rolling  Mills  at  Middle- 
town,  Ohio.  Some  garden  cities  have  been  promoted 
by  corporations,  including  the  movement  by  the  Russell 
Sage  Foundation  at  Forest  Hills,  Long  Island,  which 
have  proved  profitable  to  the  corporations  and  have 
demonstrated  that  industries  thrive  best  with  well-housed 
employees. 


248  LOWER  LIVING  COSTS  IN  CITIES 

But  all  these  attempts  affect  at  the  best  but  a  slight 
portion  of  urban  houses ;  and  the  air  of  charity  that 
enmeshes  them  makes  their  value  as  "models"  all  the 
more  questionable.  Philanthropy,  to  be  worthy  of  the 
name,  and  charity,  if  it  be  done  with  an  honest  mo- 
tive and  not  as  a  cloak  to  hide  a  multitude  of  sins,  must 
begin  with  better  wages  and  the  cessation  of  usurious 
profits.  The  philanthropist  of  old  who  collected  wealth 
without  conscience,  whether  by  paying  poor  wages  to 
his  employees,  or  charging  higher  prices  for  his  goods, 
or  giving  inadequate  service  to  his  patrons,  and  who 
doled  out  that  wealth  in  the  sweet  name  of  charity,  must 
now  be  classed  as  a .  pharisaical  hypocrite.  The  new 
philanthropy  looks  for  the  causes  of  the  social  malad- 
justment under  which  it  is  possible  for  one  man  to  com- 
mand the  resources  for  building  thousands  of  homes 
while  thousands  of  earners  are  unable  to  build  their 
own  homes.  True  philanthropy  does  not  aggravate  so- 
cial evils  with  palliatives. 


HOUSING  REGULATIONS 

The  prevailing  method  of  securing  better  urban  hous- 
ing conditions  is  the  setting-up  of  minimum  standards 
by  statutes  or  by  ordinances  and  the  enforcing  of  those 
standards  through  housing  bureaus.  This  is  America's 
distinctive  contribution  to  housing  betterment.  Dr. 
Nemenyi  of  Budapest,  sent  here  by  the  Hungarian  gov- 
ernment to  study  America's  methods  of  dealing  with  the 
housing  problem,  in  a  recent  interview  said:  "New 
York's  tenement  laws  and  their  enforcement  have  no 
parallel  anywhere  in  Europe.  New  York's  handling  of 
the  tenement  problem  is,  to  European  eyes,  unique,  ad- 
mirable, impressive.  Conditions  in  the  worst  of  your 


A  CONSTRUCTIVE  HOUSING  PROGRAM      249 

tenements  are  vastly  better  than  in  the  worst  of  Europe's. 
Your  laws  have  produced  this  superiority."  *  After  a 
four  weeks'  study  of  New  York's  tenements  in  all  parts 
of  the  city,  Dr.  Nemenyi  stated:  "The  overshadowing 
feature  of  the  New  York  tenement  situation  is  the  kind 
of  laws  you  have  and  the  way  you  force  obedience  to 
them. 

"Your  tenements  as  a  whole  are  far  better  than  those 
of  Europe,  while  your  slums  are  not  nearly  as  bad  as 
those  of  many  cities  in  Europe.  Of  course  there  are 
tenement  house  and  building  laws  in  Hungary  and 
Europe  generally,  but  they  are  not  such  laws  as  you 
have.  They  do  not  protect  the  health  and  lives  of 
dwellers  in  the  tenements  as  do  yours,  and  it  is  for  this 
reason  that  Hungary  wishes  to  revise  her  laws  along 
American  lines."  2 

The  standards  usually  provided  for  in  housing  codes 
relate  to  the  minimum  amount  of  light,  air,  sanitary  con- 
veniences, safety,  privacy,  extent  and  percentage  of  area 
that  can  be  built  over,  the  height  and  structure  of  build- 
ings, floor  space  per  occupant  and  measures  to  assure 
fire  protection.  Such  legislation  has  been  passed  by  the 
states  of  New  York,  California,  Connecticut,  Massachu- 
setts, New  Jersey,  Pennsylvania,  Indiana  and  Wisconsin. 
At  least  eighty-two  of  the  larger  American  cities  pro- 
vide more  or  less  stringent  regulations  in  their  housing 
codes.  Housing  codes  are  carried  to  even  greater 
extremes  in  certain  foreign  cities,  such  as  Berlin, 
where  the  highest  building  permitted  is  five  stories, 
thus  making  it  unnecessary  for  business  men  to  buy 
their  light  and  air  through  getting  control  of  neighbor- 

1  Lawrence  Veiller:  "Housing  Reform  Through  Legislation," 
The  Annals  of  the  American  Academy  of  Political  and  Social 
Science,  January,  1914,  p.  70. 

'Ibid.,  p.   70. 


250  LOWER  LIVING  COSTS  IN  CITIES 

ing  ground   that  skyscrapers  may  not  be  built  there- 
on. 

The  housing  problem  is  not  only  the  problem  of  en- 
abling the  greater  number  of  people  who  want  to  live 
in  decent  houses,  and  who  want  to  bring  up  their  chil- 
dren in  decent  environments,  to  do  so.  It  is  also  the 
.  problem  of  forcing  the  careless  and  indifferent  so  to 
house  themselves  as  not  to  be  a  menace  or  nuisance  to 
others.  But  more  than  this,  the  housing  problem  is  the 
problem  of  getting  landlords  to  forego  certain  types  of 
profit,  for  in  no  other  way  can  all  tenants  be  assured  of 
decent  and  sanitary  living  conditions.  Legislative  con- 
trol, enforced  and  supplemented  by  administrative  au- 
thorities, is,  therefore,  a  vital  part  of  every  well  con- 
sidered housing  program.  These  methods  alone  will 
remove  privy  vaults,  build  sewers,  put  windows  into 
dark  rooms,  assure  water  conveniences  for  every  floor 
and  privacy  for  every  household,  abolish  cellar  dwellings, 
erect  fire  escapes,  limit  the  area  that  a  block  can  be  built 
upon,  assure  courts,  demolish  insanitary  shacks  and 
loathsome  back  alley  lodgings,  and  protect  wholesome 
homes  from  the  contamination  of  the  morals  and  dis- 
eases of  near-by  insanitary  and  disreputable  tenements. 
Negative  standards  must  precede  constructive  ones. 

Housing  legislation  in  New  York  City  has  eliminated 
245,000  dark  rooms,  so  that  but  75,000  still  remain. 
Furthermore  it  has  made  certain  that  minimum  sanitary 
and  hygienic  standards  have  been  enforced  in  the  22,925 
tenements  erected  in  that  city  from  1902-1912,  at  an 
estimated  cost  of  $709,000,000,  accommodating  one  and 
a  quarter  million  persons.  And  it  has  forced  the  remod- 
eling of  old  tenements  to  meet  the  new  standards.  The 
tenement  houses  built  under  the  supervision  of  New 
York's  Tenement  House  Department  during  the  first 
decade  of  its  existence  (1901-1911)  now  shelter  over 


A  CONSTRUCTIVE  HOUSING  PROGRAM      251 

one-fourth  of  the  tenement  population.  Of  the  82,923 
old  buildings,  32,308  were  compelled  to  conform  to  the 
requirements  of  the  tenement  house  law. 

While  such  are  the  results  that  have  been  secured  in 
New  York  City  alone  by  housing  legislation,  yet  from 
that  same  city  can  be  taken  numerous  instances  to  show 
wherein  housing  legislation  and  regulation  fail.  The 
report  of  the  Tenement  House  Department  of  New  York 
for  1909  draws  a  comparison  between  the  three-story 
tenements  that  are  under  the  tenement  house  law  and 
the  two-story  houses  that  are  not  included  in  the  legal 
definition  of  a  tenement  house.  "In  the  three-story 
buildings  all  of  the  rooms  have  windows  opening  on 
the  street  or  yard,  the  hallways  are  light  and  adequate 
and  fire  escapes  are  provided.  In  the  two-story  houses 
there  are  usually  two  sleeping-rooms  without  windows 
or  other  means  for  light  and  ventilation.  The  hallways 
are  commonly  dark  and  no  fire  escapes  are  provided. 
Although  the  two-story  flats  rent  at  a  higher  rate  than 
the  three-story  ones,  the  latter  are  greatly  to  be  pre- 
ferred from  a  sanitary  and  esthetic  point  of  view. 
The  one  complies  with  recognized  standards,  while 
the  other  is  constructed  to  make  dividends  for  the  land- 
lord." 1 

In  other  words,  housing  legislation  and  its  proper  en-' 
forcement  and  administration  mend  or  end  certain  exist- 
ing ills  aimed  at  particularly  by  the  law,  and  prevent  the 
arising  of  the  same  ills  in  the  future.  These  limited  re- 
sults, however,  it  must  be  pointed  out,  are  assured  only 
through  a  fearless  interpretation  and  enforcement  of 
the  statute.  A  strong  public  sentiment  must  uphold  the 
commands  of  officials  in  order  to  counteract  the  pressure 
brought  by  landlords  and  builders. 

And  thus,  while  direct  housing  legislation  is  essential 

1  Pollock  and  Morgan:    "Modern  Cities,"  p.  54. 


252  LOWER  LIVING  COSTS  IN  CITIES 

to  the  attainment  of  even  minimum  standards,  it  is  not 
the  panacea  for  housing  ills  which  some  have  claimed  for 
it.  It  does  not,  however,  as  its  opponents  would  have 
us  think,  necessitate  higher  rentals,  nor  threaten  confisca- 
tion of  profits.  Improvements  in  housing  conditions  do 
not  necessarily  mean  higher  costs  to  the  renter ;  nor  need 
they  mean  lower  profits  to  the  landlord,  unless  those 
profits  are  so  defined  as  to  include  returns  on  fake  capi- 
tal, such  as  happens  when  sham  fire  escapes  are  erected 
and  inadequate  plumbing  installed.  A  recent  study  made 
in  Philadelphia  showed  that,  for  1,332  houses,  "where 
the  average  cost  of  improvements  approximated  from 
six  to  eight  months'  rentals,  only  on  8.4  per  cent,  were 
the  rents  increased,  while  in  1.2  per  cent,  instances  they 
were  reduced."  * 

Housing  legislation  does  not  reach  the  causes  of 
poor  home  construction  nor  the  high  costs  of  home 
maintenance.  No  program  for  housing  reform  can 
secure  permanent  results  that  does  not  get  at  these 
causes. 

Some  of  the  causes  of  high  rentals  and  poor  housing 
conditions  which  housing  legislation  does  not  affect  are : 
land  speculation  and  the  unearned  increment  in  land  val- 
ues ;  the  increased  cost  of  materials ;  the  power  of  mo- 
nopoly to  extort  its  own  prices ;  congestion  through  inef- 
fective planning  of  cities,  such  as  the  adequate  control 
of  the  number  of  houses  to  the  acre;  the  improve- 
ment of  streets;  transit  and  other  utility  costs  and 
conveniences;  the  location,  stability  and  efficiency  of 
industries;  the  wage  and  its  purchasing  power.  Nor 
does  direct  housing  legislation  promote  home  owner- 
ship. 

1  Bernard  J.  Newman :  "Congestion  and  Rents,"  The  Annals 
of  the  American  Academy  of  Political  and  Social  Science,  Janu- 
ary, 1914,  P-  66- 


A  CONSTRUCTIVE  HOUSING  PROGRAM      253 


PUBLIC  OWNERSHIP  AND  OPERATION 

Leading*  English,  German,  French,  Belgian  and  other 
European  cities  have  with  marked  success  secured  model 
home  conditions  for  their  workers  through  the  construc- 
tion and  operation  of  buildings  by  municipal  authorities. 

Most  of  the  operations  were  begun  by  condemning  and 
tearing  down  insanitary  dwellings  in  slum  areas,  purchas- 
ing the  land  on  which  these  dwellings  stood,  laying  out 
new  streets  with  all  modern  accessories,  and  then  the 
rebuilding,  at  public  expense,  of  model,  sanitary  homes, 
to  be  rented  thereafter  by  public  authorities.  The  London 
County  Council  has  thus  expended  large  sums  in  build- 
ing city  tenements.  Glasgow,  over  forty-five  years  ago, 
purchased  a  densely  populated  slum  section  in  the  central 
part  of  the  city,  demolished  the  old  buildings,  and  erected 
new  ones  in  their  stead,  to  the  very  definite  improvement 
of  housing  conditions  among  the  city's  earners.  Liver- 
pool, since  1864,  has  spent  $5,575,000  in  the  demolition 
of  insanitary  dwellings  and  the  building  of  improved 
dwellings  in  their  stead. 

Liverpool  to-day  owns  2,174  dwellings,  containing  a 
population  of  8,000  persons,  every  one  of  whom  has  been 
turned  out  of  a  cellar  or  an  insanitary  or  overcrowded 
house.  The  city  charges  rents  approximating  what  the 
people  paid  before  they  were  ejected  from  the  old,  insani- 
tary dwellings;  the  city  is  thus  carrying  its  housing 
scheme  at  a  loss  of  around  $110,000  a  year,  as  com- 
pared with  an  expenditure  of  $1,000,000  a  year  on  parks, 
museums,  libraries,  baths  and  hospitals.  In  certain  Euro- 
pean cities  public  funds  can  be  borrowed  for  the  building 
of  workingmen's  dwellings.  In  some  cases,  up  to  80  per 
cent,  of  the  total  cost  of  the  home  can  be  forwarded  to 
the  worker  and  the  rates  of  interest  are  fixed  at  from 


254  LOWER  LIVING  COSTS  IN  CITIES 

2  to  4  per  cent.  The  city  of  Cleveland  is  the  only  Ameri- 
can city  that  has  thus  far  undertaken  the  building  of 
homes  at  public  expense. 

These  ventures,  it  must  be  understood,  do  much  more 
than  merely  eliminate  insanitary  houses  and  build  model 
houses  at  low  rents  in  their  places.  Built  on  a  large 
plan,  and  more  effectively  located  than  could  be  simi- 
lar undertakings  of  a  philanthropic  character,  whether 
by  individuals  or  organizations,  they  set  the  standards 
which  private  builders  must  to  a  large  extent  live  up  to. 
This  method,  therefore,  will  often  prove  the  most  effec- 
tive means  by  which  cities  can  raise  their  housing  stand-- 
ards.  Public  housing  schemes  are  especially  to  be  com- 
mended for  the  poor  who  cannot  afford  to  rent  the 
better  private  accommodations.  They  pay  adequate  re- 
turns to  the  city,  both  financially  and  socially. 

It  has  been  urged  that  European  cities  can  enter  upon 
such  ventures  because  their  courts  have  not  narrowed 
the  power  of  condemnation  for  public  purposes,  as  in  the 
United  States,  to  land  absolutely  essential  to  the  public 
use.  A  closer  study,  however,  will  reveal  that  the  real 
difference  between  American  and  European  cities  in  this 
respect  is  not  so  much  in  their  powers  as  in  the  use  of 
their  powers.  Moreover,  sustained  effort  in  America 
can  remove  the  constitutional  limitations  in  the  way  of 
a  freer  use  of  the  power  of  eminent  domain  for  "excess 
condemnation." 

The  condemnation  of  land  and  buildings  and  the  re- 
construction of  new  tenements  thereon  have  certain  dis- 
advantages. The  hundreds  of  renters  in  the  condemned 
buildings  must  find  homes  elsewhere  in  the  interim.  The 
result  is  that  rents  in  near-by  private  buildings  are 
higher  for  the  time  being.  Many  cities,  therefore,  with 
control  over  their  utilities  and  over  their  city  plans  are 
buying  up  suburban  land  and  building  modern  working- 


A  CONSTRUCTIVE  HOUSING  PROGRAM      255 

men's  houses  thereon.  Under  this  plan  land  costs  are 
less,  there  are  no  hardships  during  replacement  and  there 
is  greater  freedom  in  planning  the  city  and  in  erecting 
single,  isolated  buildings  rather  than  multiple  buildings. 
Moreover,  land  values  in  other  suburban  sections  are 
in  this  way  indirectly  controlled.  The  movement  toward 
the  suburbanization  of  the  wage-earner  is  thus  given  a 
happy  impetus.  Ulm,  in  Germany,  offers  an  example  of 
a  city  that  has  purchased  large  tracts  of  suburban  land 
and  has  erected  thereon  cottages  and  cottage  flats.  From 
1891  to  1909  this  city  has  purchased  over  1,200  acres 
under  full  restrictions  for  $1,633,000.  Cottages  are 
erected  and  sold  to  workmen  on  easy  terms  or  the  work- 
men may  rent  them  if  they  prefer. 


CONTROLLING  LAND  VALUES 

But  no  housing  program  is  adequate  that  does  not  in- 
clude control  of  land  values. 

Mr.  Frederic  C.  Howe  has  given  the  following  ex- 
ample of  the  growth  of  unearned  increment  in  New  York 
City:  "The  whole  of  Manhattan  Island  was  first  sold 
to  the  Dutch  by  the  Indians  for  $28.  In  1904  the  land 
values  of  Greater  New  York  were  appraised  for  taxa- 
tion at  $3,057,161,290.  By  1906  the  land  had  increased 
in  value  to  $3,391,711,526.  By  1907  the  appraised  value 
of  the  land  underlying  the  city  had  advanced  to  $3,557,- 
591,504,  or  an  increase  over  the  year  before  of  $165,- 
879,978.  In  1908  the  valuation  had  still  further  increased 
to  $3,843,165,597,  or  an  increase  of  $284,271,643." 

Dr.  Scott  Nearing  in  a  pamphlet  entitled  "The  In- 
crease of  American  Land  Values"  cites  the  following 
increases  in  land  values:  "Land  in  Newark,  N.  J.,  in- 
creased from  $122,904,000  in  1907  to  $141,059,000  in 


256  LOWER  LIVING  COSTS  IN  CITIES 

1912,  an  increase  of  $18,155,000  in  five  years.  Land  in 
Dallas,  Texas,  increased  in  the  same  five-year  period 
from  $16,477,000  to  $44,605,000,  an  increase  of  $28,- 
128,000.  In  Houston,  Texas,  land  values  have  risen 
from  $19,787,000  in  1904  to  $61,389,000  in  1912,  an  in- 
crease of  $41,602,000  in  eight  years.  In  Seattle,  Wash- 
ington, in  the  seven-year  period,  from  1905-1912,  land 
has  increased  in  value  from  $70,038,000  to  $212,929,000, 
an  increase  of  $142,891,000." 

The  assessed  valuation  of  real  estate  in  the  Borough 
of  the  Bronx  increased  in  value,  due  to  the  building  of 
subways,  from  $226,600,000  in  1903  to  $616,600,000  in 
1912,  an  increase  of  173  per  cent,  in  ten  years.  The  prop- 
erties in  West  Philadelphia  increased  in  value  127.6  per 
cent,  from  1900  to  1912,  due  to  the  building  of  an  ele- 
vated-subway. 

It  needs  no  argument  here  to  show  the  need  for  con- 
trolling land  values  if  housing  costs  are  to  be  kept  at  a 
minimum.  One  fact  should  be  sufficient  and  that  is  that 
these  land  values  have  been  created  in  the  main  by  society 
and  not  by  the  individual  owner.  Moreover,  these 
"unearned"  values,  immense  as  they  are,  are  not  created 
out  of  thin  air  as  many  would  have  us  think.  They 
represent  the  contributions  made  up  of  the  pennies  of  the 
poor  and  the  dollars  of  the  well-to-do,  expressed  in  high 
food  prices  (because  the  land  is  unimproved  or  unused, 
or  held  at  speculative  prices  that  prevent  its  being  used 
for  agricultural  purposes),  in  high  rental  prices,  in  transit 
costs,  and  in  the  high  cost  of  all  goods  due  to  the  high 
rentals  that  must  be  paid  in  congested  centers.  It  is  the 
number  of  people  passing  a  given  plot  of  land  at  a  given 
time  that  creates  urban  land  value,  and  the  passing  of 
people  is  not  due  to  the  "initiative"  or  the  "genius"  or 
the  "efforts"  of  the  landlord. 

Three  means  have  been  adopted  for  controlling  land 


A  CONSTRUCTIVE  HOUSING  PROGRAM      257 

values:  (i)  public  land  ownership;  (2)  public  regulation 
of  the  uses  to  which  land  can  be  put;  (3)  taxation  (a) 
of  unimproved  land  and  (b)  of  the  unearned  incre- 
ment ;  the  single  tax  has  also  been  sparingly  adopted. 

"The  medieval  town  was  surrounded  by  a  wall  to  keep 
the  invaders  out,"  points  out  Professor  Eberstadt,  of 
Berlin,  "while  the  modern  industrial  city  is  surrounded 
by  a  wall  of  land  speculators  who  keep  the  people  in." 
Ground  values  treble  or  quadruple  themselves  during  a 
seventeen-year  period,  whereas  an  investment  at  4  per 
cent,  only  doubles  itself  in  that  time.  Now  this  increased 
land  value  is  due  more  to  conscious  municipal  activities 
and  unconscious  social  growth  and  tendencies  than  to 
any  activities  on  the  part  of  individuals.  This  fact  cer- 
tain cities  have  realized  and  have,  therefore,  begun  to 
reap  this  enhancement  in  prices  for  their  own  treasury 
through  the  ownership  of  land  within  and  without  the 
city.  This  has  been  peculiarly  true  of  German  cities. 
Mr.  Frederic  C.  Howe,  in  his  "European  Cities  at 
Work,"  gives  the  following  facts  as  to  municipal  land 
ownership  in  Germany  (pp.  97  and  98)  :  "Berlin  owns 
land  to  the  extent  of  240.8  per  cent,  of  its  total  area,  in- 
cluding the  area  owned  outside  of  its  boundaries.  Frank- 
fort owns  48.9  per  cent,  of  the  land  within  its  limits. 
Ulm  owns  80  per  cent.;  Mannheim,  35.4  per  cent.;  and 
Hanover  37.7  per  cent,  of  the  land  within  its  boundaries. 
The  table  on  page  258  l  indicates  the  extent  of  land  own- 
ership both  within  and  without  the  city,  of  a  number  of 
European  cities,  for  the  policy  of  municipal  land  owner- 
ship is  not  confined  to  Germany. 

This  tendency  toward  public  ownership  of  land  is 
growing  rapidly.  German  cities  are  constantly  adding 
to  their  possessions.  "Between  1890  and  1902  the  city 
of  Cologne  increased  its  holdings  by  1,269  Per  cent. 

1Howe:  "European  Cities  at  Work,"  pp.  97-98. 


LOWER  LIVING  COSTS  IN  CITIES 


• 

Total  Area 
of  City 

Acres 

Total 
Amount 
of  Land 
Owned 
by  City 

Acres 

Proportion  of 
Total  City 
Area 

With- 
in City, 
Per  cent. 

With- 
out City, 
Per  cent. 

Berlin  

15,689.54 
21,200.24 
14,095.25 
19,345-45 
9,677-25 
2,338.60 
10,470.37 
10,894.64 

39,151.28 
13,597-02 
8,406.84 
11,866.98 
5,674.90 

i,633-33 
4,480.79 
5,621.52 

9-2 

23-7 
32.3 
33-2 
37-7 

4-2 

3-°5 
26.0 

240.8 

37-8 
27.4 
281.1 
20.4 

65-1 
42.9 

25-9 

Munich  

Leipsic. 

Strassburg  

Hanover  

Schoeneberg  

Spandau  

Zurich  

During  the  same  period  Chemnitz  added  605  per  cent. ; 
Munich,  334  per  cent. ;  Dresden,  290  per  cent. ;  and 
Mannheim  254  per  cent,  to  their  previous  possessions. 
In  ten  years'  time  Berlin  added  21.52  square  yards  of 
land  per  head  of  its  population,  notwithstanding  its 
increase  in  size."  1 

The  wisdom  and  advisability  of  public  ownership  of 
land  hinge  definitely  upon  the  question  as  to  whether 
land  values  will  increase  more  rapidly  over  a  long  term 
of  years  than  the  interest  on  the  investment  necessary 
to  purchase  the  land.  The  undertaking  is  therefore  pe- 
culiarly commendable  to  cities  whose  growth  is  rapid 
and  whose  future  growth  is  assured.  For  static  cities 
it  is  not  so  commendable  unless  it  is  undertaken  as  the 
means  for  effective  planning  and  for  the  building-up  of  a 
city  which  will  attract  and  keep  capital  and  workers. 

The  second  method  of  controlling  land  values — the 
determining  of  the  uses  to  which  land  can  be  put — has 
1  Howe :  "European  Cities  at  Work,"  p.  96. 


A  CONSTRUCTIVE  HOUSING  PROGRAM      259 

found  its  fullest  fruition  in  German  cities,  and  in  other 
cities  where  there  is  effective  and  judicious  town  plan- 
ning. Factories  must  locate  on  the  side  of  the  city  away 
from  the  prevailing  wind  and  in  places  where  the  city 
can  or  will  assure  adequate  water,  steam  and  other  dis- 
tributing facilities.  The  territory  near  these  factory  dis- 
tricts can  then  be  dedicated  to  workmen's  homes,  with 
the  area  well  laid  out  so  as  to  give  ample  provision  for  all 
utility  facilities  and  for  parks,  playgrounds,  markets,  ter- 
minals, streets  and  recreational  facilities.  Canals,  water- 
ways, railways,  belt  line  roads  can  all  then  be  effectively 
located  under  public  control  with  the  view  of  creating 
a  community  efficient  industrially,  and  with  wholesome 
living  conditions.  The  uses  to  which  land  can  be  put 
can  further  be  limited  so  as  to  prevent  congestion  of 
traffic,  overcrowding  and  an  indiscriminate  mixture  of 
buildings  of  different  classes. 

Four  kinds  of  taxation  have  been  and  can  be  used  to 
redistribute  land  values.  These  are:  taxation  of  unim- 
proved land,  a  heavier  tax  on  lands  than  on  buildings, 
taxation  of  the  unearned  increment  only,  and  the  single 
tax. 

Many  continental  cities,  and  more  particularly  Ger- 
man cities,  place  a  higher  tax  on  vacant  land  than  on 
improved  lands,  thus  tending  to  stimulate  building  and 
to  discourage  ownership  and  control  of  land  for  specu- 
lative purposes  only.  By  assessing  land  at  its  fair  value 
and  improvements  thereon  at  25  per  cent,  of  their  value, 
Houston,  Texas,  claims  to  have  materially  reduced 
rent  throughout  the  city  and  stimulated  building  op- 
erations.1 

Under  the  unearned  increment  tax,  a  percentage  of 
the  increase  in  land  values  is  taken  either  at  stated  in- 
tervals or  as  an  incident  to  the  transfer  of  title.  The 
1  See  The  American  City,  September,  1914. 


260  LOWER  LIVING  COSTS  IN  CITIES 

former  is  the  German,  the  latter  the  English  method. 
The  percentage  usually  taken  varies  from  10  to  25  per 
cent.  In  other  words,  if  the  land  has  not  increased,  or 
if  it  has  decreased  in  value,  no  unearned  increment  tax 
is  paid;  but  if  it  has  increased  in  value  a  small  propor- 
tion of  that  increase  flows  into  the  city  treasury.  It  is 
urged  in  favor  of  the  plan  of  having  this  tax  collected 
as  an  incident  to  transfer  of  title  that  it  will  be  borne 
more  definitely  by  the  landlord  without  opportunity  of 
shifting  it  to  his  tenants. 

A  pertinent  objection  to  the  unearned  increment  tax 
is  that,  if  a  portion  of  the  increase  in  land  values  should 
flow  into  the  city  treasury,  the  city  should  also  make  up 
to  the  land-owner  in  a  similar  ratio  any  decrease  in  land 
values.  This  argument  can  be  met  only  by  pointing  out 
that  the  unearned  increment  tax  applies  solely  to  those 
lands  into  which  have  flowed  exceedingly  large  social 
values — values  which  in  the  ethical  sense  properly  be- 
long to  the  community.  In  other  words,  the  unearned 
increment  tax  is  a  payment  for  the  right  to  keep  the 
more  profitable  places,  made  profitable  by  social  and  mu- 
nicipal action,  and  is,  therefore,  an  attempt  to  distribute 
the  harm  done  to  other  land-owners  by  the  location  of 
tunnels,  restrictions  as  to  the  use  of  land,  etc.  The 
unearned  increment  tax,  judged  by  its  social  benefits  as 
well  as  its  economic  returns,  is  probably  at  once  the  most 
just  and  the  most  advisable  tax  that  can  be  levied  by 
American  legislators. 

The  shifting  of  all  taxes  to  land,  and  the  entire  exemp- 
tion from  taxation  of  buildings,  personal  property  and 
of  all  private  property  save  land — in  other  words,  the 
single  tax — has  had  many  advocates.  It  is  evident, 
however,  that  this  tax  is  not  adapted  as  yet  to  American 
customs.  Even  if  it  were  theoretically,  the  American 
method  is  to  get  at  such  things  experimentally.  Hence 


A  CONSTRUCTIVE  HOUSING  PROGRAM      261 

the  wiser  and  safer  step  is  to  begin  with  the  unearned 
increment  tax. 

CITY  PLANNING 

The  many  can  never  be  decently  housed  in  unplanned 
cities.  Unplanned  cities  become  stratified  into  mansions 
and  slums,  with  the  slums  dominating  civic  life  and 
social  well-being.  So  closely  are  housing  and  planning 
interrelated  that  there  can  be  no  effective  housing  pro- 
gram that  is  not  a  part  of  a  well  considered  city  plan. 
The  cost  of  a  planned  city  can  be  definitely  estimated  in 
dollars  and  cents;  the  cost  of  the  planless  city  must  be 
measured  in  physical,  social  and  industrial  inefficiency, 
waste  and  incapacity. 

Upon  the  city  plan  depend  the  adequacy  of  the  recre- 
ational system,  the  sufficiency  of  the  sewers,  the  purity 
and  cheapness  of  the  water  supply,  the  cost  and  service 
standards  of  gas  and  electricity,  the  adequacy  and  cor- 
relation of  the  transportation  system,  the  width  of  streets 
and  their  industrial  effectiveness,  the  number  and  char- 
acter of  open  spaces,  the  depth  of  the  block,  the  per- 
centage of  the  block  built  upon,  the  height  of  houses, 
the  location  of  industries,  the  accessibility  of  employ- 
ment, the  beauty  and  wholesomeness  of  the  neighbor- 
hood, the  extent  of  congestion,  the  value  of  land  and  the 
relation  to  markets  and  to  the  educational  and  commer- 
cial sub-centers  of  the  city. 

The  zone  system  is  a  characteristic  method  used  by 
German  cities,  in  specifying  the  uses  to  which  land  can 
be  put.  Mannheim,  for  instance,  "is  divided  into  three 
building  zones.  In  the  first  zone,  or  business  district,  60 
per  cent,  of  the  land  may  be  covered  by  structures  which 
must  not  exceed  five  stories  in  height.  In  the  next  outer 
zone  50  per  cent,  of  the  lot  area  may  be  built  upon, 


262  LOWER  LIVING  COSTS  IN  CITIES 

while  the  structures  may  not  exceed  four  stories  in 
height.  In  the  outlying  sections  three  stories  is  the  limit, 
while  a  smaller  percentage  of  the  land  may  be  built  upon. 

"In  the  business  district  of  Frankfort  75  per  cent,  of 
the  land  may  be  covered  by  buildings,  which  may  not 
exceed  five  stories,  or  more  than  65  feet  in  height.  In 
the  second  outer  zone  buildings  may  be  four  stories  high, 
but  never  higher  than  the  width  of  the  street.  In  the 
third  suburban  zone  two  stories  is  the  limit. 

"The  building  ordinances  of  Cologne  provide  that  25 
per  cent,  of  the  land  must  be  left  free  in  the  business 
section,  35  per  cent,  in  the  next  two  outer  zones,  while 
in  the  suburban  residence  section  only  50  per  cent,  may 
be  built  upon.  In  Berlin  the  height  of  buildings  in  front 
is  limited  to  the  width  of  the  street,  with  a  maximum 
of  70  feet.  The  height  may  be  increased  to  72  feet  if 
the  structure  is  set  back  from  the  building  line."  * 

The  districting  of  Boston  into  four  zones,  for  the  regu- 
lation of  the  height  of  buildings,  has  been  upheld  by  the 
United  States  courts.  Acts  to  authorize  the  adoption 
of  the  zone  system  have  been  introduced  in  Wisconsin 
and  California.  Thus  the  idea  is  already  being  adopted 
in  American  cities. 

Closely  related  to  planning  is  the  vital  connection  be- 
tween housing  and  the  efficiency,  availability  and  cost 
of  the  city's  public  utilities.  Upon  transportation  facili- 
ties depend  the  ease,  rapidity  and  flexibility  of  commerce 
and  the  facility  and  cost  of  getting  to  profitable  em- 
ployment. The  simple  mathematical  rule  that  doubling 
the  radius  quadruples  the  area  points  out  the  effect  the 
extension  of  the  transportation  system  has  upon  the  areas 
available  for  housing  purposes.  European  cities,  par- 
ticularly German  and  English  cities,  have  realized,  as 
American  cities  have  never  realized,  the  social  value  of 
1  Howe :  "European  Cities  at  Work,"  pp.  101-102. 


A  CONSTRUCTIVE  HOUSING  PROGRAM      263 

furnishing  gas,  electricity  and  other  utilities  at  or  very 
near  the  actual  cost  of  providing  them.  A  case  in  point 
is  the  cheap  gas  and  adequate  facilities  furnished  English 
workers  by  municipal  gas_  undertakings  in  England. 
Even  the  cooking  stoves  and  other  facilities  are  rented 
at  a  return  but  little  above  replacement  values.  Con- 
veniences at  reasonable  costs  within  the  home,  coupled 
with  recreational  facilities  without,  greatly  enhance  the 
attractiveness  of  life  to  the  English  worker. 

No  city  plan  is  complete  that  does  not  include  ade- 
quate provisions  for  the  location  and  encouragement 
of  industries.  The  factors  and  forces  affecting  indus- 
trial development  are:  (i)  shipping  facilities;  (2)  tran- 
sit and  other  utility  facilities  for  workers;  (3)  the  cost 
of  fuel  or  availability  of  water  power;  (4)  character 
of,  and  facilities  for  securing  and  handling,  raw  material ; 
(5)  price  of  land;  (6)  stability,  efficiency  and  content- 
ment of  labor. 

A  critical  analysis  of  these  several  factors  will  show 
the  intimate  relationship  of  all  of  them  to  housing  and 
city  planning.  Shipping  facilities  depend  upon  the  loca- 
tion of  terminals,  the  service  by  train  and  by  boat,  the 
existence  of  adequate  transshipping  machinery.  The 
factory  owner  includes  in  the  actual  wage  his  laborers 
receive  the  cost  to  them  of  getting  to  and  from  their 
work  and  also  the  cost  and  adequacy  of  the  other  mu- 
nicipal utilities  such  as  gas,  electricity,  water,  etc.  All 
these  are  vital  factors  in  the  actual  wage;  and  the  em- 
ployer must  interest  himself  in  the  actual  as  well  as  in 
the  nominal  wage  received  by  his  employees. 

Well  planned  cities  can  locate  industries  so  as  to  be 
available  to  near-by  water  supplies  and  can  so  plan  their 
shipping  facilities  as  to  definitely  lower  fuel  costs.  The 
public  control  of  the  uses  to  which  land  can  be  put,  if 
accompanied  by  the  setting  aside  of  sufficient  quantities 


264  LOWER  LIVING  COSTS  IN  CITIES 

for  industrial  purposes,  will  easily  bring  land  values 
down  to  the  point  favorable  to  the  location  and  opera- 
tion of  industries. 

Propitious  to  town  planning  and  the  efficient  location 
of  industries  is  the  rapid  decentralization  in  city  popu- 
lations as  evidenced  by  the  reports  of  the  last  census. 
From  1900  to  1910  the  population  of  cities  of  over 
200,000  increased  33.2  per  cent,  within  the  cities  proper 
as  compared  with  an  increase  of  43  per  cent,  in  their 
outlying  districts.  Residential  and  industrial  communi- 
ties within  fifteen  miles  of  American  metropolitan  cities 
occupy  over  three  times  the  amount  of  territory  within 
those  cities  while  accommodating  but  little  over  one- 
fourth  the  number  of  people.  During  this  same  decade 
the  increase  in  the  population  of  Philadelphia  was  127 
per  cent.,  as  compared  with  an  increase  of  199  per  cent, 
in  the  near-by  county  of  Delaware,  formerly  almost  ex- 
clusively an  agricultural  county. 

This  tendency  toward  decentralization,  furthered  by 
the  desire  of  manufacturers  to  get  out  where  lands  are 
cheaper,  and  by  the  rapid  extension  of  interurban  and 
other  transit  lines,  is  a  potent  factor  in  increasing  the 
room  space  per  tenant  in  the  congested  sections  of  cities, 
in  doing  away  with  the  common  use  of  halls  and  stairs, 
and  in  the  increase  of  the  social  and  economic  con- 
veniences purchased  by  the  rent  money  of  the  urban 
citizen.  Not  only  should  the  renter  get  more  for  his 
money  through  this  decentralizing  movement,  but  the 
cities  themselves  will  be  saved  heavier  expenses  for  the 
enlargement  of  sewers  and  water  mains,  for  heavier  costs 
for  fire  protection  such  as  high  pressure  pumps,  for  in- 
creased costs  in  police  supervision,  health  regulations, 
building  inspection,  added  street  lights  and  more  inten- 
sive traffic  regulations  essential  to  congested  city  popula- 
tions. 


A  CONSTRUCTIVE  HOUSING  PROGRAM      265 

While  this  movement  is  thus  propitious  for  better 
things,  it  portends  ill,  indeed,  unless  the  American  cities 
are  given  and  exercise  large  powers  not  only  for  amelio- 
rating conditions  within  the  city  limits,  but  also  for 
planning  areas  which  must  either  commercially  or  geo- 
graphically be  annexed  to  them  at  no  distant  time. 

NON-EMPLOYMENT  MINIMIZED 

Coupled  with  this  movement  for  cities  well  planned 
for  homes  and  for  business  facilities,  can  go  a  read- 
justment in  industrial  life  that  will  materially  lessen 
non-employment.  A  poignant  factor  in  poor  housing 
conditions  is  casual  and  chronic  unemployment.  He  who 
is  casually  or  chronically  without  employment  sooner 
or  later  must  "economize"  in  his  housing  quarters.  We 
have  too  often  looked  upon  this  kind  of  unemployment 
as,  to  use  the  phrase  of  a  Kansas  statute,  "An  act  of 
God  or  other  sudden  disaster,"  rather  than  a  social  con- 
dition which  can  be  changed  by  conscious,  individual  and 
community  action.  To  be  sure,  there  will  always  be 
eras  of  hard  times,  but  such  eras  have  little  to  do  with 
the  subject  in  question.  The  non-employment  spoken 
of  here  is  that  due  to  improper  or  unscientific  organiza- 
tion of  industrial  establishments  and  to  such  abuses  as 
those  characteristic  of  certain  textile  factories  where  a 
larger  number  of  men  are  kept  on  the  rolls  than  can  pos- 
sibly be  employed,  in  order  to  squeeze  out  competitors. 
A  typical  method  is  to  keep  on  the  rolls  say  1,000  men 
and  use  but  800,  either  by  laying  everybody  off  one,  two, 
three  or  four  afternoons,  or  telling  certain  of  the  men  to 
report  from  day  to  day.  It  is  said  that  an  average  work- 
man in  the  printing  business  loses  25  per  cent,  of  his 
time ;  in  some  cases  there  is  employment  for  but  28  weeks 
out  of  52. 


266  LOWER  LIVING  COSTS  IN  CITIES 

To  meet  this  situation  is  a  problem  for  efficiency  and 
management  rather  than  for  supine  acquiescence.  It 
can  be  met  in  many  ways,  all  of  which  are  now  being 
used  by  a  portion,  albeit  too  small  a  portion,  of  factory 
managers  and  business  men,  the  most  efficient  of  whom 
are  coming  to  see  that  continuous  changes  in  personnel 
involve  loss  of  their  own  time  in  teaching  new  trades 
to  new  people  and  thus  ultimately  lower  the  factory  or 
business  output 

The  first  step  in  the  reduction  of  non-employment  is 
to  teach  employees  to  do  more  than  one  thing.  As  Mr. 
Morris  L.  Cooke,  Director  of  the  Department  of  Public 
Works,  Philadelphia,  has  pointed  out  in  a  recent  ar- 
ticle, there  is  no  reason  why  employees  should  not  be 
taught  as  many  things  as  they  are  capable  of  learning. 
This  scheme  may  be  made  a  part  of  that  procedure 
which  the  labor  unions  hold  to  be  best  adapted  to  pro- 
mote the  prosperity  of  the  worker.  Mr.  Cooke  also 
points  out  in  this  same  article  that  unemployment  can 
be  definitely  lowered  by  a  closer  relationship  between 
selling  and  manufacturing  departments.  "The  attitude 
should  be,"  he  says,  ''that  both  the  selling  and  manu- 
facturing arms  of  a  business  should  have  like  opportuni- 
ties but  like  responsibilities.  The  selling  force  should 
be  so  organized  that  it  can  keep  the  manufacturing  side 
going,  so  that  day  to  day,  week  to  week,  and  month  to 
month  fluctuations  in  the  number  of  employees  do  not 
occur."  Still  another  method  of  preventing  this  unem- 
ployment pointed  out  by  Director  Cooke  is  the  manu- 
facturing of  special  goods  during  dull  times.  This  is 
especially  applicable  to  such  concerns  as  shoe  factories. 
"In  one  shoe  concern  they  have  a  special  department, 
which,  during  dull  seasons,  makes  standard  lines  at  a 
somewhat  reduced  cost.  These  goods  are  disposed  of 
through  special  selling  agencies  and  are  manufactured 


A  CONSTRUCTIVE  HOUSING  PROGRAM      267 

only  in  order  to  equalize  the  load  and  to  keep  men  em- 
ployed when  otherwise  they  would  be  laid  off."  Trade 
in  special  foreign  fields  is  also  in  keeping  with  this  idea. 
Still  other  business  concerns  are  employing  a  factory 
nurse  on  a  business  basis,  the  sole  purpose  being  to 
eliminate  the  number  of  "days  off"  through  colds,  minor 
accidents  and  preventable  disease. 

Employment  agencies  are  also  of  value,  though  their 
relative  importance,  as  compared  with  certain  of  the 
other  factors  herein  mentioned,  has  been  exaggerated. 
It  is  upon  the  employer  that  the  responsibility  must  rest. 
Mr.  Cooke  himself  in  1913,  when  600  men  were  thrown 
out  of  employment  in  the  city  of  Philadelphia,  sent  out 
letters  to  employers  throughout  Philadelphia  and  suc- 
ceeded in  getting  work  for  a  large  number  of  these  la- 
borers. Similar  responsibility  assumed  by  other  em- 
ployers of  labor  will  definitely  diminish  the  burden,  so- 
cial and  economic,  which  all  must  bear,  due  to  chronic 
or  casual  unemployment. 

Standardization  in  method  and  operation  will  enable 
employees  to  go  with  greater  ease  from  concern  to  con- 
cern. Standardization  thus  means  mobility  and  not  im- 
mobility as  so  many  have  argued.  And,  finally,  there 
must  be  recognition,  by  established  custom,  of  the  right 
of  the  industrial  worker  to  participate  in  determining 
the  conditions  of  his  work. 

HOME  OWNERSHIP 

Under  such  conditions  as  these,  the  laborer  can  look 
forward  to  permanent  employment  in  his  own  community 
and  can  afford  to  own  his  own  house,  while  the  public 
will  find  it  worth  while  to  invest  time  and  money  in  regu- 
lating housing  conditions.  With  cities  efficiently  planned, 
their  industries  permanently  located  and  encouraged 


268  LOWER  LIVING  COSTS  IN  CITIES 

through  proper  public  facilities,  and  with  the  elimination 
of  all  needless  casual  and  chronic  unemployment,  the 
home  owner  will  not  be,  as  he  too  often  is  at  the  present 
time  in  American  cities,  under  greater  pressure  than  the 
non-owner  to  accept  wage  reductions,  or  under  greater 
stress  than  the  non-owning  population  during  hard  times. 
With  permanency  in  home-making  conditions,  the  flat 
built  for  speculative  profit  will  give  way  to  the  home 
built  for  utility  and  social  returns. 

Numerous  methods  have  been  in  use  for  the  encour- 
agement of  home  ownership  through  making  capital 
available  at  lower  interest  rates  and  for  securing  the 
labor  and  utility  facilities  essential  to  conducting  housing 
operations  on  a  scale  sufficiently  large  to  keep  costs  at 
a  minimum.  Three  means  used  to  attain  these  ends  are : 
homestead  aid,  the  limited  dividend  company,  and  the  co- 
operative building  association. 

Homestead  aid  has  been  supplied  by  the  various  mu- 
tual banking  institutions,  although  as  yet  it  has  not  been 
so  developed  as  to  allow  participation  by  urban  residents 
in  wholesale  developments  for  workmen.  The  limited 
dividend  company  has  been  in  operation  in  this  country 
for  a  number  of  years,  usually  with  the  rate  fixed  at  5  per 
cent.  "Up  to  the  present  time  twelve  or  more  companies 
have  erected  some  eighteen  hundred  or  more  houses  and 
as  many  tenements  in  the  United  States.  Several  addi- 
tional companies  have  recently  been  organized,  so  that 
the  movement  is  evidently  spreading.  These  are  stock 
companies  similar  to  any  real  estate  company,  except 
for  the  dividend  limitation.  They  either  rent  or  sell  for 
cash  or  instalments.  Speculative  profit  is  eliminated,  the 
surplus  going  into  improving  the  property  or  reducing 
payments.  But  the  residents,  as  such,  have  no  voice  in 
the  affairs  of  the  company;  and  the  creation  of  new 
companies  depends  entirely  on  outside  initiative  of  a 


A  CONSTRUCTIVE  HOUSING  PROGRAM      269 

philanthropic  or  altruistic  nature.  In  England  most  of 
the  garden  suburbs  have  been  organized  as  limited  divi- 
dend companies  on  a  5  per  cent,  basis,  there  being  at 
present  twenty-one  companies,  which  have  already 
erected  over  9,000  houses  on  2,400  acres  and  propose  to 
expand  over  10,000  acres,  with  a  total  of  37,000  houses.1 

The  third  method  is  that  of  the  cooperative  building 
associations.  American  building  and  loan  associations, 
which  have  total  assets  of  $1,137,600,648  and  a  member- 
ship of  2,516,936,  are  typical  American  agencies  for  at- 
taining this  end.  In  other  countries  cooperative  housing 
associations  have  been  formed  to  even  a  larger  extent 
and  with  more  definite  results. 

From  returns  published  in  1902  by  the  Cooperative 
Union,  it  appears  that  334  cooperative  societies  in  Great 
Britain  have  built  37,267  houses  for  their  members  at 
a  cost  of  about  $40,000,000  (£8,127,155). 

It  should  go  without  saying  that' accompanying  such  lo- 
cal measures  must  be  national  legislation  lifting  tariff 
burdens  from  building  materials.  In  the  appended  foot- 
note is  given  a  statement  recently  made  by  Mr.  E.  P. 
Wheeler,  Chairman,  Law  Committee,  National  Civil  Ser- 
vice League,  and  Chairman,  Committee  American  Bar 
Association,  on  "Remedies  for  Law's  Delay,"  in  an  arti- 
cle in  The  Annals,  July,  1913,  as  to  the  burden  which 
tariff  reductions  lay  upon  housing  costs.2 

1  Arthur  Coleman  Comey:  "Copartnership  for  Housing  in 
America,"  The  Annals  of  the  American  Academy  of  Political 
and  Social  Science,  January,  1914,  pp.  140-141. 

*  "Some  years  ago  I  had  occasion  to  build  four  tenement  houses 
in  New  York  City.  I  found  that  there  was  a  tariff  tax  upon  all 
the  materials  that  entered  into  the  construction  of  the  houses : 
stone,  brick,  lime,  plaster,  the  lead  pipe  and  the  brass  work  of 
the  plumbing,  the  hardware  of  the  windows  and  the  doors,  the 
tin  plate  with  which  the  roof  was  covered.  In  short,  not  one 
item  that  went  into  those  houses  was  on  the  free  list.  I  made  a 


270  LOWER  LIVING  COSTS  IN  CITIES 

The  housing  question  need  not  be  a  menacing  one.  On 
the  contrary,  American  cities  can  offer  to  all  their  work- 
ers housing  conditions  that  make  for  a  wholesome  physi- 
cal and  social  outlook  at  reasonable  rentals. 

computation  of  the  effect  of  this  tariff  tax  upon  the  cost  and 
found  that  I  could  have  built  five  houses  for  the  same  money  if 
it  had  not  been  for  the  tariff  tax  upon  the  materials  which 
composed  them.  .  .  .  Had  I  been  able  to  build  five  houses  in- 
stead of  four,  I  should  not  have  charged  any  more  rent  for 
the  five  than  I  was  obliged  to  for  the  four.  In  other  words, 
the  rent  of  each  apartment,  if  I  had  built  the  five  houses,  would 
have  been  one-fifth  less." 


CHAPTER   XVII 

EDUCATIONAL   COSTS  VERSUS   EDUCATIONAL 
RESULTS 

The  national  expenditure  for  education  in  1911  was 
$446,726,929.  This  represents  an  increase  of  214  per 
cent,  since  1890,  in  which  year  $140,506,715  was  ex- 
pended for  this  purpose.  In  other  words,  the  amount 
spent  on  education  in  1911  was  three  tinies  as  great  as 
that  spent  in  1890,  and  twice  as  great  as  that  spent  in 
1900.  During  the  same  twenty-one-year  period  (1890- 
1911)  there  was  an  increase  of  40  per  cent,  (from  12,- 
722,581  to  18,035,118)  in  the  number  of  pupils  enrolled. 

In  1870-1871  the  per  capita  expenditure  (total  popu- 
lation) for  education  was  $1.75;  in  1910-1911  it  had  in- 
creased to  $4.76.  The  per  capita  expenditure  per  pupil 
in  average  attendance  was,  in  1870-1871,  $15.20;  in  1909- 
1910  it  was  $33.33-1  The  per  capita  expenditure  for 
schools  in  all  cities  over  30,000  in  population  was,  in 
1912,  $5.01,  as  compared  with  a  per  capita  expenditure 
of  $0.35  for  health  and  $2.04  for  police. 

The  per  capita  costs  (1910)  for  the  various  classes  of 
schools  are:  (i)  elementary  schools,  $22.67;  m'gn 
schools,  $47.13;  normal  schools,  $158.34;  universities, 
colleges  and  professional  schools,  $303.48.  The  esti- 
mated total  cost  of  public  elementary  schools  is  $383,- 
127,609;  of  public  high  schools,  $43,122,825;  of  normal 

*  While  the  per  capita  expense  doubled  during  this  period, 
the  number  of  pupils  actually  present  trebled,  increasing  from 
4,545,317  in  1870  to  12,827,387  in  1910. 

271 


272  LOWER  LIVING  COSTS  IN  CITIES 

schools,  $14,022,749;  and  of  universities,  colleges  and 
professional  schools,  $76,497,293. x 

Such  are  our  educational  costs.  What  are  the  results  ? 
The  total  sums  appropriated  to  education  cannot  and 
should  not  be  lowered.  But  can  we  get  better  results 
from  the  money  expended? 

To  judge  the  efficiency  of  our  educational  system  re- 
quires the  setting-up  of  standards  by  which  that  ef- 
ficiency shall  be  tested. 

Eighty-five  per  cent,  of  those  in  attendance  at  our  pub- 
lic schools  later  earn  their  living  through  industrial 
processes.  One  of  the  tests  of  the  adequacy  of  the  re- 
sults obtained  through  our  present  educational  system 
must,  therefore,  be  the  kind  of  livelihood  earned  by  those 
who  have  for  a  greater  or  less  time  been  under  its  in- 
fluence. 

A  recent  study  made  by  the  Public  Education  Associa- 
tion of  Philadelphia  shows  that,  out  of  13,740  child 
workers,  fourteen  to  sixteen  years  of  age,  in  that  com- 
munity, 37  per  cent,  of  the  boys  and  49  per  cent,  of  the 
girls  were  employed  in  factories.  The  percentage  in 
each  occupation  for  both  girls  and  boys  was  found  to 
be  as  follows: 

1  Some  idea  as  to  the  increase  in  attendance  and  enrolment 
in  schools  of  the  United  States  may  be  gleaned  from  the  fol- 
lowing facts:  In  1890  there  were  in  the  elementary  schools 
13,610,533.  In  1910  the  number  had  risen  to  18,339,828 — an  in- 
crease of  34  per  cent.  The  greatest  increase  in  enrolment  oc- 
curred in  the  secondary  schools,  where  an  increase  from 
367,003  (1890)  to  1,131,466  (1910) — 226  per  cent. — took  place. 
In  the  higher  schools  the  number  of  pupils  rose  from  135,242 
in  1890  10,340,628  in  1910 — an  increase  of  153  per  cent.  An- 
other large  increase  took  place  in  the  enrolment  in  universities 
and  colleges.  In  1890  there  were  64,472  receiving  university 
and  college  training.  In  1910  the  number  had  increased  to  184,- 
712 — an  increase  of  186  per  cent,  in  twenty  years. 


EDUCATION:  COSTS  VERSUS  RESULTS      273 

Occupations  Number  Per  Cent. 

Store 2,793  2o-3 

Office 1,200  8.7 

Messenger 346  2 . 5 

Factory 5,968  43.4 

Street  trades 214  i .  5 

Skilled  trades 422  3.0 

Service 168  i .  2 

Housework i,7$6  12.8 

Miscellaneous 873  6.3 

But  more  important  than  the  kind  of  work  is  the  re- 
muneration received  for  their  work.  This  same  asso- 
ciation found  that  the  80  per  cent,  of  Philadelphia's  pub- 
lic-school pupils  who  did  not  go  further  than  the  high 
school  entered  "low-grade  industries,  untrained,  un- 
guided,  unguarded,  where  they  average  between  $4  and 
$4.50  per  week  while  at  work;  where  they  jump  from 
job  to  job,  with  consequent  loss  to  the  industry  and  to 
themselves.  By  eighteen  they  have  reached  their  maxi- 
mum wage,  and  by  thirty  they  begin  to  go  down  hill."  x 

Such  facts  as  these,  crowding  in  as  they  do  from  every 
section  of  the  United  States,  show  all  too  conclusively 
that  our  schools  are  turning  into,  or  are  allowing  to  go 
out  into,  our  industrial  establishments  at  least  four  out 
of  every  five  of  the  public-school  pupils  with  no  founda- 
tion in  skill,  with  no  definite  knowledge  as  to  earning  a 
livelihood,  and  with  all  too  little  foundation  in  health, 
and  in  moral  and  economic  standards.  Over  60  per 
cent,  of  the  males  at  least  sixteen  years  of  age  in  the 
United  States  are  earning  less  than  $626  per  annum,  hav- 
ing to  feed,  clothe  and  shelter  themselves  and  their  fam- 
ilies on  this  income.  This  fact  is  a  sad  commentary 
alike  on  the  efficiency  of  our  educational  system  and  on 
the  justice  of  current  conceptions  of  wealth  distribution. 
Nor  are  conditions  worse  in  the  United  States  than  in 

1  James  S.  Hiatt:    "Vocational  Guidance." 


274  LOWER  LIVING  COSTS  IN  CITIES 

other  countries.  It  is  alleged  that  30  per  cent,  of  the 
residents  of  English  cities  are  dependents  on  less  than  six 
dollars  a  week.  Industrial  prosperity,  if  that  prosperity 
is  to  include  all,  cannot  exist  while  such  conditions  pre- 
vail. 

Mr.  James  M.  Hodge  presented  at  the  New  York 
meeting  (December,  1903)  of  the  American  Society  of 
Mechanical  Engineers  a  paper1  dealing  with  the  money 
value  of  technical  training.  In  this  paper  an  analysis 
was  presented  giving  the  actual  progress  in  earning  power 
made  by  four  groups  of  men  working  in  the  mechanic 
arts:  first,  the  unskilled  labor  group;  second,  the  shop- 
trained  or  apprentice  group;  third,  the  trade-school 
group ;  and  fourth,  the  technical  school  group.  He  capi- 
talized the  annual  earnings  of  each  of  these  groups  at 
5  per  cent,  in  order  to  get  at  the  potential  invested  value 
of  each  class  of  workers  upon  which  interest  is  drawn 
on  pay  day.  The  unskilled  labor  group  reached  at  the 
age  of  twenty-two  their  maximum  income  of  $10.20 
per  week,  which,  capitalized  at  5  per  cent.,  gave  .to  each 
laborer  a  potential  or  invested  value  on  which  he  drew 
interest  on  pay  day  of  $10,000.  The  shop-trained  group 
reached  their  maximum  average  at  the  age  of  twenty- 
four,  at  $15.80  per  week,  giving  to  each  laborer  a  po- 
tential value  of  about  $15,500.  The  trade-school  group 
rose  rapidly  in  income  power  up  to  the  age  of  twenty- 
five,  when  the  income  was  $22  per  week,  or  an  invested 
value  per  laborer  of  $22,000;  but  as  the  income  of  this 
group  continued  to  increase  up  to  the  age  of  thirty-two, 
the  final  potential  value  was  $25,000.  The  technical 
school  group  reached  their  maximum  income  at  the  age 
of  thirty-two,  with  $43  per  week,  giving  them  a  poten- 
tial value  of  $43,000. 

A  comparison  has  been  drawn  of  the  wages  made  by 

1  See  Volume  25  of   the  Transactions. 


EDUCATION:  COSTS  VERSUS  RESULTS      275 

2,000  Massachusetts  boys,  one  thousand  of  whom  went 
to  work  at  the  age  of  fourteen,  the  other  thousand  re- 
maining in  school  until  eighteen  years  of  age.  At  the 
age  of  twenty-five  the  first  group  received  on  an  average 
of  $12.75  per  week,  while  the  second  group  was  re- 
ceiving on  an  average  of  $31  per  week.  The  boys  of  the 
first  group  were  making  $4  per  week  at  fourteen,  $7  at 
eighteen,  $9.50  at  twenty,  $11.50  at  twenty-two,  and 
$12.75  Per  week  at  twenty-five;  while  the  boys  of  the 
second  group  were  making  $10  at  eighteen,  $15  at  twenty, 
$20  at  twenty-two,  and  $31  at  twenty-five.  In  other 
words,  the  investment  of  say  $5.50  per  week  in  board, 
carfare  and  clothing  for  four  more  years  of  school  train- 
ing netted  an  average  amount  of  $18.25  Per  week  after 
seven  years  in  industrial  life. 

The  low  wages  received  by  those  without  school  train- 
ing, and  the  higher  wages  received  by  those  with  an 
effective  school  training,  point  both  to  the  inadequacy  of 
our  present  educational  regime,  and  to  the  great  value 
that  will  accrue  to  the  individual  and  to  society  through 
a  more  effective  and  efficient  educational  system. 

To  be  sure,  efficiency  in  education  is  not  the  only  step 
needed  in  order  to  secure  a  living  wage  for  those  who 
work  and  a  monetary  reward  for  all  workers  in  pro- 
portion to  their  productive  power.  But  these  ends  can- 
not be  gained  without  educational  efficiency.  Something 
more  than  increased  efficiency  may  be  needed  to  insure 
increased  wages.  But  certain  it  is  that  there  can  be  no 
sustained  increase  in  wages  save  through  a  sustained 
increase  in  productive  power.  While  society  is  read- 
justing its  wealth-distributing  forces  and  conceptions, 
so  that  just  rewards  may  be  given  to  workers,  as  meas- 
ured by  what  they  produce,  the  schools  must  lay  the 
foundation  for  increased  earning  power  among  all 
earners. 


276  LOWER  LIVING  COSTS  IN  CITIES 

The  test  of  power  to  earn  a  living  is  not  the  only  test 
of  school  efficiency.  The  second  test,  equally  important, 
is  the  personal  power  gained  in  school  years  through 
knowledge  and  insight  into  contemporary  industrial 
conditions  and  social  institutions.  The  school  stage 
of  life,  to  be  sure,  is  not  the  only  time  when  a  child  is 
being  socialized.  In  pre-school  days  are  laid  the  founda- 
tions for  his  standards  of  ethics  and  his  conceptions  of 
his  own  rights  and  the  rights  of  others.  At  this  age  he 
learns  through  suggestion  and  imitation,  precepts  and 
prohibition,  to  adjust  himself  to  the  social  and  economic 
standards  of  his  family  and  his  immediate  environment. 
But  school  days  introduce  to  the  child  the  standards, 
customs  and  institutions  of  his  community  as  a  whole. 
Upon  the  school,  therefore,  must  rest  the  responsibility 
for  inculcating  standards  of  stability  and  self-reliance; 
for  teaching  such  facts  as  the  right  of  each  individual 
to  a  full  share,  and  no  more,  of  the  wealth  he  creates ; 
and  for  teaching  such  fundamental  facts  about  social 
customs  and  social  institutions  as  will  prepare  the  child 
for  being  at  once  an  efficient  producer  and  a  helpful 
member  of  society.  If  goodly  foundations  are  laid 
during  the  school  stage,  further  growth  and  power  both 
as  a  producer  and  a  citizen  follow  naturally  through  all 
life. 

Judged  by  this  test,  our  schools,  while  far  ahead  of 
other  social  institutions  of  the  day,  are  still  encumbered 
with  the  inertia  of  past  ideals  and  needs. 

It  must  be  remembered,  however,  that  it  is  a  difficult 
task  to  present  current  social  institutions  in  their  true 
light,  so  warped  do  they  seem  by  current  controversies 
and  conflict.  But  the  difficulties  to  the  proper  presenta- 
tion of  the  subject  only  emphasize  all  the  more  the  need 
for  their  presentation.  If  it  is  difficult  for  the  teacher 
to  evaluate  the  industrial  and  social  institutions  of  the 


EDUCATION:  COSTS  VERSUS  RESULTS      277 

day,  how  much  more  difficult  it  is  for  the  school  child  to 
get  his  own  bearings  in  such  a  wilderness. 

The  /evidences  of  the  failure  of  the  schools,  and  not 
only  of  the  schools  but  of  other  social  institutions  as 
well,  to  inculcate  adequate  conceptions  of  citizenship 
are  to  be  found  in  the  willingness  of  men  to  sacrifice 
community  needs  to  their  own  greed  and  pecuniary  ad- 
vancement. The  citizen's  obligations  are  currently  con- 
strued to  mean  merely  his  obligations  to  vote  and  to 
write  to  his  congressman.  But  citizenship  includes  all 
the  attitudes  and  relationships  involved  in  earning  a  liv- 
ing and  being  a  member  of  society.  The  school,  the 
church,  the  family  and  other  social  institutions  cannot 
be  said  to  be  doing  their  full  duty  so  long  as  men  can 
steal  from  their  city  treasury  in  the  manner  politely  called 
graft  and  still  be  thought  of  as  decent  citizens,  simply 
because  through  stolen  goods  they  can  purchase  coun- 
try residences,  servants  and  the  other  trappings  of  social 
superiority.  He  who  revels  in  profits  gleaned  from  his 
power  to  exact  monopoly  prices  from  public  utilities  or 
other  interests  is  yet  to  be  classed  with  the  pirate  who 
overpowers  unarmed  vessels  on  the  high  seas.  The 
school  must  be  more  than  a  place  set  aside  to  learn  les- 
sons ;  it  must  be  a  place  set  aside  to  learn  the  limits 
to  greed  and  self-aggrandizement  and  to  learn  the  power 
and  sense  of  gratification  that  come  with  accepting  an 
aggressive  share  of  responsibility  for  current  maladjust- 
ments in  the  economic  and  social  world.  This  lesson 
once  learned,  the  taxpayer's  money  will  no  longer 
have  to  go  in  such  large  measure  for  the  enforcement 
of  pure  food  laws,  for  the  regulation  of  quasi-public 
corporations,  for  punitive  and  remedial  institutions,  for 
the  repayment  of  graft  and  for  the  countless  other 
burdens  that  uncontrolled  greed  annually  levies  upon  so- 
ciety. The  heart  of  every  true  educator  warms  as  he 


278  LOWER  LIVING  COSTS  IN  CITIES 

realizes  the  rapidity  with  which  the   schools  are  now 
accepting  this  new  responsibility. 

The  cultural  test  is  the  third  test  that  can  be  made  as 
to  the  adequacy  of  our  current  educational  system.  The 
cultural  test  includes  the  command  of  expression  in 
speech  and  in  writing,  the  ability  to  read  thoughtfully 
and  with  appreciation,  a  taste  for  good  literature,  the 
ability  to  collect  and  organize  material,  and  such  a  gen- 
eral command  of  the  best  in  the  educational  field  as  to 
make  life  ever  richer  in  content  and  meaning.  Judged 
by  this  test,  the  schools  have  still  much  to  accomplish. 
A  sub-committee  of  the  general  educational  committee 
of  the  National  Association  of  Corporation  Schools  ad- 
dressed an  inquiry  to  eighty-two  of  its  corporation  mem- 
bers, asking,  among  other  things,  the  particulars  in  which 
the  training  of  the  public  school  pupils  was  found  to  be 
inadequate  as  evidenced  by  the  work  of  those  pupils 
coming  into  employment  direct  from  school.  The  fifty- 
one  corporations  that  answered  found  public-school  train- 
ing to  be  inadequate  in  the  following  particulars: 

Reading 

Writing 

Arithmetic 

Geography 

Spelling 

Punctuation 

Concentration 

Application 

Definite  knowledge 

Accuracy 

Knowledge  of  commercial  needs 

Ability  to  converse  properly 

Courtesy 

Articulation  of  speech 


EDUCATION:  COSTS  VERSUS  RESULTS      279 

Initiative 

Discipline 

Coordination  of  the  theoretical  and  the  practical 

Training  in  exact  habits 

Ability  to  follow  directions 

General  information 

Thoroughness 

Analytical  and  reasoning  ability 

Postal  regulations 

The  fourth  test  of  educational  efficiency  from  the  point 
of  view  of  productive  power  and  living  costs  is  the  fa- 
cility with  which  the  school  students  "find"  themselves 
when  seeking  employment.  Little  need  be  said  as  to  the 
efficiency  of  our  educational  system  when  judged  by  this 
test.  The  daily  family  budgets  of  our  working  classes 
speak  more  eloquently  of  the  school's  failure  here  than 
can  any  number  of  statistics.  It  cannot  be  too  often 
repeated  that  for  these  conditions  the  school  is  not  alone 
responsible.  But  that  the  school  must  bear  its  share  in 
moving  away  from  such  conditions  there  can  be  no  doubt. 

He  who  grows  pessimistic  when  testing  educational 
efficiency  by  social  results  needs  for  encouragement  to 
turn  to  the  strides  the  schools  have  already  taken  and 
to  the  constructive  measures  now  under  way,  through 
which  ultimately  the  efficiency  of  the  school  system,  even 
on  the  basis  of  present  money  expenditures,  will  be 
vastly  increased.  A  survey  of  what  is  being  done  will 
indicate,  at  the  same  time,  what  more  can  be  done. 

Of  the  steps  being  taken  to  secure  better  educational 
results  for  the  money  invested,  the  first  to  be  noted  are 
those  pertaining  to  schoolroom  efficiency  and  effective- 
ness. Schoolroom  budgets  are  being  systematized  and 
reduced  to  a  basis  of  unit  costs  so  that  efficiency  can  be 
measured  and  expenditures  and  results  intelligently  com- 


28o  LOWER  LIVING  COSTS  IN  CITIES 

pared.  Better  training  is  being  demanded  for  teachers, 
and  the  training  of  teachers  is  more  and  more  including 
the  fundamentals  in  the  social  sciences.  School  "jobs" 
are  no  longer  the  rightful  spoils  of  the  politician.  The 
subject-matter  of  textbooks  is  being  overhauled  as  never 
before  and  the  laboratory  is  being  introduced  from  the 
kindergarten  to  the  graduate  school  of  the  university. 
Educators  are  translating  into  schoolroom  action  the 
old  axiom  that  the  child  whose  mentality  is  being  over- 
worked through  textbooks  is  no  better  off  than  the  child 
whose  physical  vigor  is  being  sapped  in  the  factory. 
Segregation  of  the  subnormal  child  on  the  one  hand,  and 
the  abnormal  child  on  the  other,  coupled  with  individuali- 
zation  in  the  teaching  of  all  children,  is  taking  heavy 
burdens  from  the  teacher  and  giving  a  happy  stimulus 
to  application  by  every  child  in  the  schoolroom.  Even 
in  the  university  stop-watches  are  being  used  to  ascer- 
tain the  time  the  professor  spends  in  talking,  as  com- 
pared with  the  time  given  to  the  students  for  self-ex- 
pression. Age-progress-health-mentality-tests  are  being 
applied  for  promotions  and  grade  classifications  so  that 
the  schoolrooms  of  to-day,  especially  those  in  which 
there  are  semi-annual  promotions,  are  no  longer  places 
where  only  the  average  child  finds  work  suited  to  his 
needs  and  possibilities.  Clearing-houses  for  efficiency 
tests  and  pedagogical  methods  are  weeding  out  the  medi- 
ocre and  preserving  the  best  in  educational  devices. 
Time  cards  are  being  used,  not  so  much  to  gauge  how 
the  teacher  spends  her  every  minute,  as  to  ascertain  the 
amount  of  time  devoted  to  the  various  studies  and  activi- 
ties of  the  schoolroom,  in  order  to  weigh  their  relative 
value  and  merit. 

Through  compulsory  education  laws  and  through  the 
rehabilitation  of  schoolroom  activities,  pupils  are  being 
retained  under  school  influence  sufficiently  long  to  be 


EDUCATION:  COSTS  VERSUS  RESULTS      281 

fundamentally  affected  by  it.  The  result  is  that  the  child 
of  to-day  (1910)  is  in  school  twenty-four  days  more 
per  year  than  was  the  child  of  1870. 

The  cultural  work  of  the  schoolroom  is  being  and  can 
be  further  improved  by  a  change  in  the  content  of  school 
books,  by  thorough  spelling  tests,  by  using  "little  clas- 
sics" for  reading  matter,  by  relating  the  reading  and 
instruction  of  the  classroom  to  the  topics  and  institu- 
tions of  the  day,  by  enriching  the  school  curriculum  while 
keeping  it  simple  enough  for  assimilation;  and  by  mak- 
ing instruction  definite  and  useful. 

The  indictment  made  against  the  school  by  Professor 
Dewey  in  his  book  on  "The  School  and  Society"  that, 
"upon  the  ethical  side  the  tragic  weakness  of  the  present 
school  is  that  it  endeavors  to  prepare  future  members 
of  the  social  order  in  a  medium  in  which  the  conditions 
of  the  social  spirit  are  eminently  wanting"  is  no  longer 
true  of  the  best  of  modern  schools.  Through  instruc- 
tions in  morals,  through  history  so  taught  as  to  give 
meaning  to  social  institutions,  through  making  geography 
a  study  of  the  institutions  and  customs  of  other  races 
and  the  products  and  industries  of  other  climes  rather 
than  a  mere  study  of  the  "sailor"  geography  of  names 
and  things,  through  the  laboratory  method  of  teaching 
civics,  and,  in  the  higher  grades,  through  courses  in  the 
social  sciences,  the  leading  modern  schools  are  equip- 
ping their  pupils  with  a  knowledge,  at  once  useful  and 
practical,  of  the  social  institutions  and  industries  of  their 
own  times — a  knowledge  that  will  write  new  and  larger 
meanings  and  greater  productive  power  into  the  later 
years  of  a  work-a-day  world.  The  need  and  meaning 
of  social  institutions  are  being  emphasized  through  an 
extension  in  student  self-government,  a  movement  that 
has  reached  even  a  few  of  the  universities.  Organized 
play  and  cooperative  efforts  in  recreation  centers  and  in 


282  LOWER  LIVING  COSTS  IN  CITIES 

the  classroom  are  teaching  power  through  cooperation 
and  individual  strength  through  group  action. 

This  new  point  of  view  is  well  expressed  by  the  chair- 
man of  the  committee  on  social  studies  ("History, 
Civics  and  Economics")  of  the  commission  appointed  by 
the  National  Education  Association  on  "The  Reorgani- 
zation in  Secondary  Education": 

"It  is  probable  that  the  high-school  teachers  of  social 
studies  have  the  best  opportunity  ever  offered  to  any 
social  group  to  improve  the  citizenship  of  the  land.  This 
sweeping  claim  is  based  upon  the  fact  that  the  million 
and  a  third  high-school  pupils  are  probably  the  largest 
group  of  persons  in  the  world  who  can  be  directed  to 
a  serious  and  systematic  effort,  both  through  study  and 
practice,  to  acquire  the  social  spirit. 

"Good  citizenship  should  be  the  aim  of  social  studies 
in  the  high  school.  While  the  administration  and  instruc- 
tion throughout  the  school  should  contribute  to  the  so- 
cial welfare  of  the  community,  it  is  maintained  that 
social  studies  have  direct  responsibility  in  this  field. 
Facts,  conditions,  theories,  and  activities  that  do  but 
contribute  rather  directly  to  the  appreciation  of  methods 
of  human  betterment  have  no  claim.  Under  this  test  the 
old  civics,  almost  exclusively  a  study  of  government 
machinery,  must  give  way  to  the  new  civics,  a  study  of 
all  manner  of  social  efforts  to  improve  mankind.  It 
is  not  so  important  that  the  pupil  know  how  the  Presi- 
dent is  elected  as  that  he  shall  understand  the  duties 
of  the  health  officer  in  his  community.  The  time  for- 
merly spent  in  the  effort  to  understand  the  process  of 
passing  a  law  over  the  President's  veto  is  now  to  be 
more  profitably  used  in  the  observation  of  the  vocational 
resources  of  the  community.  In  line  with  this  emphasis 
the  committee  recommends  that  social  studies  in  the 
high  school  shall  include  such  topics  as  the  following: 


EDUCATION:  COSTS  VERSUS  RESULTS      283 

community  health,  housing  and  homes,  public  recrea- 
tion, good  roads,  community  education,  poverty  and  the 
care  of  the  poor,  crime  and  reform,  family  income,  sav- 
ings banks  and  life  insurance,  human  rights  versus  prop- 
erty rights,  impulsive  action  of  mobs,  the  selfish  con- 
servatism of  tradition,  and  public  utilities.  .  .  . 

"History,  too,  must  answer  the  test  of  good  citizenship. 
The  old  chronicler  who  recorded  the  deeds  of  kings 
and  warriors  and  neglected  the  labors  of  the  common 
man  is  dead.  The  great  palaces  and  cathedrals  and  pyra- 
mids are  often  but  the  empty  shells  of  a  parasitic  growth 
on  the  working  group.  The  elaborate  descriptions  of 
these  old  tombs  are  but  sounding  brass  and  tinkling 
cymbals  compared  to  the  record  of  the  joys  and  sorrows, 
the  hopes  and  disappointments  of  the  masses,  who  are 
infinitely  more  important  than  any  arrangement  of  wood 
and  stone  and  iron.  In  this  spirit  recent  history  is  more 
important  than  that  of  ancient  times;  the  history  of  our 
own  country  than  that  of  foreign  lands;  the  record  of 
our  own  institutions  and  activities  than  that  of  strang- 
ers; the  labors  and  plans  of  the  multitudes  than  the 
pleasures  and  dreams  of  the  few." 

The  following  course  in  civics  has  been  evolved  by 
Dr.  J.  Lynn  Barnard  for  the  Philadelphia  School  of 
Pedagogy,  in  order  to  meet  the  needs  for  acquainting 
the  students,  through  a  laboratory  method  and  a  study 
of  social  forces  and  facts  round  about  them,  with  the 
social  life  in  which  they  must  take  a  part: 

"In  the  practice  school  (fifth  to  eighth  school  years, 
inclusive)  of  the  Philadelphia  School  of  Pedagogy,  the 
following  tentative  course  in  civics  is  gradually  evolving, 
with  evident  interest  to  both  pupil  and  teacher. 

"In  the  first  half  of  the  fifth  year  a  beginning  is  made 
with  the  child's  common  experience  within  his  home  and 
his  school.  Gas  is  the  first  subject  taken  up  informally 


284  LOWER  LIVING  COSTS  IN  CITIES 

and  the  children  are  encouraged  to  tell  what  they  know 
about  it  and  its  uses.  The  teacher  guides  the  conversa- 
tion so  that  it  naturally  leads  to  the  question  of  where 
we  get  our  gas.  The  gas  pipe  is  traced  through  the 
house  to  the  meter  and  then  to  the  street.  When  it  is 
learned  that  the  gas  is  manufactured  at  a  central  plant 
the  children  are  encouraged  to  visit  it,  with  teacher  or 
parent,  and  the  result  of  the  visit  is  a  letter  or  report  on 
what  was  seen.  In  like  manner  the  subjects  of  elec- 
tricity, water,  sewage,  and  the  telephone  are  considered. 
After  the  service  of  the  community  to  the  child  has  been 
shown  with  each  of  the  above,  the  reciprocal  duties  of 
the  child  to  the  community  are  brought  out  by  careful 
questioning,  which  follows  the  lines  of  the  pupils'  own 
observation  and  experience. 

"In  the  second  half  of  the  fifth  year  what  the  child 
sees  by  looking  out  of  the  window,  at  home  or  at  school, 
is  drawn  upon  for  material.  For  example,  the  police- 
man, the  fireman,  the  postman,  the  street  sweeper,  the 
garbage  collector,  the  ash  collector,  are  severally  taken 
up  in  the  manner  already  described,  never  omitting  a 
possible  trip  and  report  or  forgetting  to  emphasize  the 
corresponding  duties  of  citizenship  resting  upon  the 
young  citizens  of  the  class. 

"During  the  early  part  of  the  sixth  year  some  of  the 
educational  institutions  of  the  city  are  visited,  such  as 
schools,  playgrounds,  parks,  libraries,  museums,  histori- 
cal buildings  and  localities.  Later  in  the  year  visits  are 
made  to  the  various  public  institutions,  such  as  city  hall, 
bourse,  custom  house,  mint,  armories  and  arsenals,  hos- 
pitals, and  juvenile  court.  No  regular  textbooks  are 
used  in  the  fifth  and  sixth  years,  but  much  supplementary 
material  is  introduced  by  the  teacher  to  aid  in  the  in- 
terpretation of  what  has  been  observed  on  the  various 
trips.  Among  other  suitable  reading  books,  special  men- 


EDUCATION:  COSTS  VERSUS  RESULTS      285 

tion  ought  to  be  made  of  Richmond  and  Wallach's  'Good 
Citizenship,'  and  Hill's  'Lessons  for  Junior  Citizens.'  By 
the  close  of  the  sixth  year  the  pupils  have  acquired  a 
fund  of  first-hand  civic  information  and  experience  of 
a  concrete  and  practical  nature,  no  attempt  having  been 
made  to  generalize  or  to  discuss  political  rights  or  duties 
from  a  legal  standpoint.  In  fact,  the  word  'government' 
is  not  even  used;  only  the  more  general  term  'commu- 
nity.' 

"In  the  seventh  year  more  attention  may  safely  be 
given  to  the  end  and  aim  of  governmental  activity  and 
the  way  in  which  public  and  private  agencies  unite  to 
accomplish  results.  For  the  purpose  no  better  introduc- 
tion can  be  found  for  Philadelphia  girls  and  boys  than 
the  beginnings  and  growth  of  community  action  in  their 
home  city.  They  will  see  how  various  civic  functions, 
such  as  street  paving  and  cleaning,  and  water  supply, 
at  first  performed  by  each  householder  for  himself, 
were  gradually  taken  over  by  each  municipality  and 
performed  for  all  alike.  This  concrete  example  of  com- 
munity growth  leads  naturally  to  a  discussion  of  the 
meaning  of  'community'  and  'citizenship.'  The  important 
truth  is  impressed  upon  the  pupils  that  they  are  now 
citizens  of  various  communities,  namely,  the  home,  the 
school,  the  playground,  the  church,  the  city,  the  state, 
the  nation.  The  family  and  the  home  as  factors  in  this 
community  life  are  particularly  emphasized,  that  the 
children  may  rightly  appreciate  the  civic  importance  of 
the  home.  Then  follows  the  story  of  the  making  of 
American  citizens  out  of  a  constant  stream  of  foreign 
immigrants,  both  as  to  naturalization  itself  and  as  to 
the  educative  process  that  may  fit  the  strangers  into  their 
new  city  environment.  A  series  of  studies  is  next  un- 
dertaken to  find  out  how  the  community  aids  the  normal 
citizen  in  relation  to  life,  health,  property,  working  and 


286  LOWER  LIVING  COSTS  IN  CITIES 

business  conditions,  transportation  and  communication, 
education,  recreation,  religious  worship.  This  is  nat- 
urally followed  by  a  brief  study  of  how  the  community 
takes  care  of  its  subnormal  citizens,  usually  referred 
to  as  the  dependents,  the  defectives,  and  the  delinquents. 
Emphasis  is  placed  upon  the  idea  of  prevention,  or  of 
restoration  wherever  possible.  Poverty,  vice  and  crime 
are  coming  to  be  recognized  as  social  diseases.  This  is 
a  fact  which  every  boy  and  girl  should  be  made  to  feel. 
As  each  function  is  discussed,  the  organization  of  the 
city  government  to  do  this  community  work  is  outlined, 
with  frequent  reference  to  the  Philadelphia  charter  and 
to  ordinances  of  councils.  Careful  consideration  is  given 
to  the  cooperation  of  private  agencies  with  various  mu- 
nicipal bureaus  and  departments,  that  the  pupils  may  see 
how  community  and  citizen  work  together.  How  the 
city  gets  its  money  to  do  all  it  does  is  briefly  explained. 
"By  the  time  the  eighth  year  is  reached  the  pupil 
has  become  so  thoroughly  grounded  in  the  governmental 
activities  of  the  city  that  he  is  ready  to  be  taken  into 
the  larger  field  of  state  and  nation.  During  the  first 
term  the  work  shapes  itself  as  follows:  first,  how  the 
community  aids  the  normal  citizen  in  his  desire  for 
health,  security  of  person  and  property,  business  oppor- 
tunity, education;  and  second,  how  the  community  pro- 
vides for  its  unfortunates,  by  means  of  charitable  and 
penal  institutions.  This  includes  some  consideration  of 
the  simpler  forms  of  business  law  and  practice,  and  also 
some  of  the  commoner  types  of  criminal  offenses  and 
the  method  of  their  repression  and  punishment.  The 
governmental  organization — legislative,  executive,  judi- 
cial— back  of  these  activities  is  sketched  in  outline,  both 
as  to  selection  and  control  of  state  officials,  not  forget- 
ting to  discover  where  the  money  is  found  to  keep  the 
machinery  going.  During  the  second  term  of  the  eighth 


EDUCATION:  COSTS  VERSUS  RESULTS      287 

year  the  pupils  learn,  as  fully  as  the  time  permits,  how 
the  federal  government  looks  after  the  varied  needs  and 
interests  of  a  hundred  million  citizens  and  subjects,  at 
home  and  abroad. 

"While  the  study  of  municipal  government  is  going 
on,  the  class  is  organized  on  the  plan  of  the  Philadelphia 
city  government,  so  far  as  practicable,  and  then  accord- 
ing to  the  commission  plan  and  by  an  easy  transition, 
when  state  and  national  governments  are  reached,  the 
class  takes  on  those  organizations  respectively.  This 
will  be  recognized  as  different  from  the  well-known 
'school  city'  plan  in  that  the  class  is  organized  for  pur- 
poses of  instruction  and  not  for  purposes  of  self-gov- 
ernment 

"For  the  seventh  and  eighth  years  a  helpful  textbook 
has  been  found  which  admirably  illustrates  the  newer 
civics,  Dunn's  'The  Community  and  the  Citizen.' 

"It  will  be  observed  that  throughout  the  last  two  years, 
when  the  more  serious  study  of  civics  is  being  attempted, 
the  order  followed  is  invariably  that  of  the  child's  own 
interest  and  appreciation,  namely,  from  function  to  struc- 
ture, from  the  executive  department  which  does  things 
to  the  legislative  which  plans  the  things  to  be  done  and 
the  judicial  which  interprets  and  helps  enforce  those 
plans ;  and  then,  if  necessary,  to  the  charter  or  consti- 
tution which  lays  down  the  legal  powers  and  duties  of 
each  branch  of  government. 

"Moreover,  the  possibilities  for  cooperation  between 
the  community,  acting  through  government,  and  the  citi- 
zens, young  and  old,  acting  singly  or  in  voluntary  as- 
sociations, are  never  lost  sight  of.  How  great  is  this 
departure  from  the  solemn  farce  of  practically  memo- 
rizing the  federal  Constitution — now  in  vogue  in  the 
city  of  Penn  and  elsewhere — can  best  be  appreciated  by 
those  teachers  who  are  anxiously  awaiting  deliverance 


288  LOWER  LIVING  COSTS  IN  CITIES 

from  bondage  through  long-overdue  revision  of  their 
prescribed  course  of  study." * 

As  are  civic  habits,  so  are  civic  conditions.  It'  is  in 
the  formation  of  right  civic  habits,  therefore,  that  con- 
structive work  must  be  done.  All  else  is  ameliorative 
at  the  best.  Such  constructive  work  can  be  done  most 
effectively  only  in  the  school  stage  of  life.  The  incul- 
cation of  civic  habits  that  will  preserve  and  sacrifice  is 
the  basic  step  in  any  permanent  stability  in  urban  life. 

The  tendencies  and  activities  of  modern  schools 
through  which  the  school  children  of  to-day  can  become 
more  largely  independent,  resourceful,  capable  producers 
of  to-morrow  are:  (i)  conservation  of  health;  (2)  ad- 
justment in  curricula,  including  vacation,  night,  continu- 
ation and  vocational  schools;  (3)  reorganization  of  sec- 
ondary schools;  (4)  the  democratization  of  higher  edu- 
cation. 

In  another  chapter  is  given  in  detail  what  schools  are 
doing  and  can  do  to  extend  the  years  of  productiveness 
and  years  of  productive  powers  through  health  conser- 
vation. Physical  examination  of  school  children;  hy- 
gienic practices  in  the  schoolroom  and  on  the  play- 
ground ;  restriction  of  study  hours  at  home  and  in  school, 
so  as  to  insure  a  reserve  of  energy;  free  dispensaries 
for  the  needy;  proper  construction  of  desks;  scientifi- 
cally arranged  schoolrooms;  wholesome  lunches  at  or 
near  actual  cost ;  corrective  gymnastic  exercises ;  proper 
presentation  of  physiological  and  hygienic  facts — through 
these  and  other  means,  the  city  child  of  to-day  is  being 
made  as  strong  physically  as  his  country  cousin  and  is 
being  armed  to  combat  disease  and  inertia  through  all 
his  adult  years.  These  methods  will  ultimately  affect 
living  costs  by  prolonging  and  increasing  purchasing 
power. 

Bulletin  41,  United  States  Bureau  of  Education,  p.   16,  ff. 


EDUCATION:  COSTS  VERSUS  RESULTS      289 

Vacation  schools,  first  adopted  as  part  of  the  regular 
school  system  of  Newark,  N.  J.,  in  1885,  were  originally 
held  for  the  purpose  of  giving  to  the  children  of  the 
streets  opportunity  for  more  wholesome  living  and  for 
interesting  study  under  competent  direction.  They  are 
also  used  now  for  the  purpose  of  preventing  retardation 
in  grades  with  all  its  attendant  ills  to  the  child  and  his 
classmates  and  for  the  purpose  of  giving  to  the  more 
capable  students  opportunity  of  advancement  to  a  grade 
where  work  is  sufficiently  difficult  to  necessitate  intensive 
application. 

In  night  schools  child  workers  are  given  opportunity 
to  perfect  themselves  in  the  regular  grammar,  high-school 
and  commercial  courses,  while  taking  special  instruction 
in  the  practical  arts,  such  as  dressmaking,  millinery, 
drawing,  chemistry,  and  in  the  vocational  courses  par- 
ticularly fitting  them  for  their  daily  work.  Continuation 
schools  have  much  the  same  end  in  view. 

Vacation  schools  are  making  day  schools  more  ef- 
ficient, while  night  and  continuation  schools  are  con- 
serving to  large  numbers  of  children  an  educational 
training  they  could  otherwise  never  avail  themselves  of ; 
and  these  are  the  very  children  who  would  later  do 
the  work  of  the  unskilled  and  poorly  paid. 

Through  vocational,  trade,  manual  training  and  con- 
tinuation schools,  as  they  are  variously  called,  our  edu- 
cational system  is  tending  to  send  the  young  out  both 
more  adequately  equipped  to  make  a  living  and  better 
acquainted  with  contemporary  life  and  institutions.  No 
longer  are  these  functions  left  to  chance  or  to  casual 
guidance  by  parents.  Heretofore  the  children  of  our 
hand-  and  machine-working  classes  left  school  early  for 
the  reason  that  their  parents  could  see  little  advantage 
in  school  training  after  the  children  had  learned  to  read, 
write  and  cipher  a  little.  The  want  of  adaptation  of  ac- 


2QO  LOWER  LIVING  COSTS  IN  CITIES 

tivities  of  our  grammar  grades  and  high  schools  to  in- 
dustrial needs  has  filled  our  shops  with  foreign  skilled 
labor  and  turned  American  school  children  into  unskilled 
trades  with  almost  as  little  knowledge  even  of  these  as 
any  foreigner  could  have.  For  this  American  indus- 
tries have  suffered.  Adaptation  to  industrial  needs  was 
given  its  first  real  impetus  in  this  country  through  manual 
training  schools.  The  advocates  of  this  class  of  schools 
found  support  among  the  psychologists  and  leading  edu- 
cators who  appreciated  the  need  for  and  value  of  a 
"motor"  and  physical  as  well  as  mental  training.  Then 
the  human  interest  in  this  new  curriculum  attracted  stu- 
dents who  would  have  otherwise  dropped  out  of  the 
schools  entirely;  attendance  was  more  regular  and  in- 
terest sustained.  The  theories  that  such  training  taught 
accuracy  and  self-control,  because  any  defect  in  the 
process  was  obvious  in  results,  were  borne  out  in  prac- 
tice. Educators  had  long  recognized  the  value  of  teach- 
ing by  doing  and  by  objective  methods,  but  the  tradi- 
tional school  system  still  continued  to  overemphasize 
the  purely  mental  part  of  school  training,  so  that  to  get 
the  best  educational  advantages  a  child  had  to  be  deaf, 
dumb,  blind,  feeble-minded,  incorrigible  or  a  truant.  And 
most  wholesome  in  its  social  effects  was  the  inculcation 
in  manual  training  students  of  a  respect  for  manual  labor 
and  an  intelligent  interest  in  the  skilled  trades. 

Ninety  per  cent,  of  the  public-school  pupils  later  go 
into  some  branch  of  industry  or  business.  This  big 
fact  is  finally  forcing  educators  to  the  realization  that 
there  ought  to  be  less  of  a  break  between  the  schools 
and  the  vocations  later  followed  by  the  bread  earner. 
Hence  out  of  the  manual  training  school  movement  is 
coming  the  movement  for  trade  schools. 

Personal  efficiency  requires  an  income,  to  meet  twen- 
tieth century  living  standards,  of  at  least  ten  dollars  a 


EDUCATION:  COSTS  VERSUS  RESULTS      291 

week.  The  school  must  do  its  share  in  making  the  chil- 
dren of  to-day  the  efficient  producers  of  to-morrow. 
And  this  means  that  the  minimum  standard  must  be  a 
ten-dollars-a-week  wage  for  the  public-school  graduate. 
To  society  human  resources  are  more  valuable  than  nat- 
ural resources,  and  to  the  business  man  himself  employee 
value  is  more  vital  than-  property  value.  The  recogni- 
tion of  these  facts  will  reorganize  our  educational  sys- 
tems so  that  there  will  be  a  training  of  the  senses  as 
well  as  of  the  mind  and  so  that  the  pupil  through  sim- 
ple processes  will  be  brought  in  contact  with  the  best 
in  our  social  and  industrial  life.  Thus  the  general  edu- 
cation of  the  child  can  be  continued  while  his  industrial 
proficiency  is  being  attained. 

The  trade  school  has  had  its  highest  development  in 
Prussia.  The  American  Association  of  Commerce  and 
Trade  of  Berlin  has  recently  issued  a  report  as  to  Prus- 
sia's trade  schools,  which  runs  as  follows: 

"In  1884,  664  continuation  schools,  including  58,400 
pupils,  were  under  the  jurisdiction  of  the  Administra- 
tion of  Commerce  and  Trade,  and  the  number  has  since 
increased  to  1,719  trade  schools  and  381  commercial 
schools,  with  a  total  attendance  of  360,000  pupils.  Be- 
sides this  the  number  of  special  schools  has  increased 
from  56  with  8,000  pupils  to  204  with,  in  all,  44,300 
pupils.  Although  in  1885  about  570,000  marks  were 
spent  by  the  Government  in  supporting  these  schools, 
in  1910  the  money  granted  for  the  same  purpose 
amounted  to  more  than  13,000,000  marks,  apart  from 
4,500,000  marks  for  supplies.  .  .  .  The  German  Trade 
Department  described  the  importance  of  these  schools  in 
the  following  words:  'Their  purpose  is  not  alone  to  act 
through  the  instruction  imparted,  but  to  form  a  founda- 
tion for  other  institutions  providing  for  the  welfare  of 
the  younger  population.'  " 


292  LOWER  LIVING  COSTS  IN  CITIES 

One  stock  objection  to  trade  schools  deserves  the  seri- 
ous consideration  of  all  interested  either  in  democracy 
or  industrial  efficiency,  and  that  is  that  trade  schools 
tend  to  make  artisans  and  not  citizens  and  that  adapt- 
ability and  ambition  are  educated  out  of  trade-school  stu- 
dents. The  alert  business  men  of  to-day,  appreciating 
the  value  of  the  long-term  employee,  are  endeavoring 
to  so  organize  the  various  departments  of  their  work  that 
most  of  their  employees  can  be  taught  a  number  of  trades 
or  functions  and  hence  be  readily  transferable  from  one 
department  to  another.  If  this  adaptability  is  advisable 
from  a  business  point  of  view,  it  is  trebly  advisable 
from  a  social  point  of  view.  While  acquainting  pupils 
with  the  trades  and  industries  of  their  communities, 
trade  schools  must  fit  them  for  efficient  work  in  any 
vocation  they  may  later  choose.  Industrial  democracy 
is  essential  to  social  or  civic  democracy.  Thus  trade 
schools  with  a  proper  perspective  continue  the  courses 
in  science,  in  literature,  in  civics,  in  history,  and  are 
so  planned  "as  to  be  of  value  to  both  the  employer  and 
the  employee  of  the  future,  so  planned  as  to  lead  toward 
mobility  in  earning  power  and  in  industry. 

Two  present-day  tendencies  in  the  industrial  world 
will  prove  to  be  powerful  allies  in  perfecting  the  work 
of  trade  schools.  One  of  these  is  the  movement  toward 
the  standardization  of  the  operations  of  the  office,  the 
store  and  the  factory;  the  other  is  the  so-called  corpora- 
tion ^  school. 

The  Department  of  Business  of  the  National  Educa- 
tion Association  has  appointed  a  committee  to  stand- 
ardize clerical  and  office  operations  and  methods.  The 
standardization  of  machine  parts  by  manufacturers  and 
motion  studies  by  students  of  scientific  management  are 
both  leading  toward  uniformity  and  simplicity  in  indus- 
trial processes. 


EDUCATION:  COSTS  VERSUS  RESULTS      293 

Operations  and  processes  so  standardized  and  simpli- 
fied will  be  as  useful  when  taught  with  the  cultural  view 
as  when  taught  with  the  utilitarian  view.  Thus  the  trade 
school  can  at  once  prepare  efficient  workers  and  a  citi- 
zenry well  equipped  with  industrial  information. 

With  these  foundations,  the  corporation  schools,  such 
as  are  being  carried  on  by  the  National  Association  of 
Corporation  Schools,  will  then  have  the  simple  task  of 
acquainting  the  graduates  of  such  trade  schools  with  the 
needs  of  their  specific  businesses.  Large  corporations  or 
stores,  either  singly  or  in  groups,  can  render  and  are 
rendering  with  slight  expense  these  services  for  them- 
selves on  their  own  premises.  For  the  assistance  of  the 
small  factory  owner  and  business  man,  the  public-school 
building  can  be  utilized;  and,  if  the  demand  warrants 
it,  the  instruction  staff  as  well  can  be  taken  from  the 
general  educational  staff.  The  New  York  City  Board 
of  Education  last  year  conducted  the  first  factory  school 
in  this  country.  The  employer  allowed  the  students  of 
this  school,  "Public  School  No.  4,"  three  hours  a  day 
with  full  pay  for  their  studies,  which  were  in  charge  of 
a  public-school  teacher. 

These  school  readjustments  will  not  only  create  a 
more  efficient  earner  and  a  higher  type  of  citizenry,  but 
will  eliminate  the  social  losses  now  accruing  through 
"dead  enders."  One-half  the  pupils  leave  school  before 
the  eighth  grade.  There  are  now  in  the  country  ap- 
proximately 3,000,000  children  who  are  in  "dead-end" 
jobs  earning  on  an  average  of  two  dollars  a  week  with 
slight  hope  of  future  advancement.  The  president  of 
the  Wisconsin  State  Board  of  Industrial  Education  re- 
cently said :  "There  are  in  Philadelphia  to-day  some  18,- 
ooo  children  under  fourteen  who  are  out  of  school 
and  engaged  in  'dead-end'  employment.  These  figures 
are  not  peculiar  to  Philadelphia.  Every  city  has  the 


294  LOWER  LIVING -COSTS  IN  CITIES 

same  problem.  It  is  safe  to  say  that  one-eightieth  of 
the  population  of  any  representative  industrial  city  is 
made  up  of  boys  and  girls  between  fourteen  and  fifteen 
years  of  age  who  are  utterly  useless  factors  in  the  eco- 
nomic world.  New  York  has  90,000,  and  Boston  12,000." 
Mr.  H.  E.  Miles,  Chairman  of  the  Committee  on  In- 
dustrial Education,  appointed  by  the  National  Associa- 
tion of  Manufacturers,  said  recently  in  an  address  at 
Buffalo,  N.  Y. :  "Here  in  Buffalo  some  4,500  little 
children,  fourteen  years  old,  break  out  of  your  school 
doors  because  the  law  says  they  don't  have  to  stay  in 
school  after  that  age.  On  leaving  they  are  unable  to 
use  their  bodies,  minds  and  hands  in  a  good  human 
way. 

"You  have  approximately  9,000  children  between  the 
ages  of  fourteen  and  fifteen  on  the  streets,  idle  or  in  a 
blind  alley,  hopeless  and  with  no  prospect  of  betterment. 
In  New  York  there  are  80,000  such  children." 

On  such  figures  as  these  Mr.  Miles  bases  his  conclu- 
sion that  the  value  of  human  resources  going  to  waste 
in  the  United  States  is  between  $200,000,000,000  and 
$250,000,000,000  annually.  Certainly  this  means  a  call 
to  greater  efficiency  on  the  part  of  our  public  school  sys- 
tem. 

Vocational  and  employment  bureaus  conducted  by  edu- 
cational or  municipal  authorities  can  go  hand  in  hand 
with  the  school  system  that  creates  an  efficient  producer, 
thus  further  tending  to  free  cities  from  the  heavy  costs 
of  casual  and  non-employment.  Boston  has  organized 
a  vocational  bureau  for  the  purpose  of  "collecting  and 
recording  information  as  to  the  occupations  of  the  com- 
munity, educating  parents  and  children  in  the  advantage 
of  special  training  for  any  occupation,  counseling  chil- 
dren and  parents  on  their  specific  problems,  and  connect- 
ing the  children  with  actual  opportunities  for  employ- 


EDUCATION :  COSTS,  VERSUS  RESULTS      295 

ment." *  City  employment  bureaus,  developed  to  a 
degree  of  special  efficiency  in  German  cities,  would  sup- 
plement the  work  of  the  school  systems  and  make  avail- 
able to  our  industries  and  preserve  to  society  a  vast 
total  of  human  resources. 


THE  REORGANIZATION  OF  SECONDARY  SCHOOLS 

It  is  axiomatic  that  those  communities  reap  most  boun- 
tifully from  their  school  expenditures  whose  schools 
are  best  adapted  in  their  curricula  and  activities  to  the 
community's  needs.  The  weakness  of  our  secondary 
schools,  long  felt  by  educators  and  students  of  our  school 
systems,  has  been  the  wide  breach  between  community 
needs  and  secondary  school  courses.  But  2  per  cent,  of 
the  graduates  of  secondary  schools  go  on  to  college;  yet 
98  per  cent,  of  our  secondary  schools  form  their  courses 
of  study  for  those  2  per  cent. 

High-school  courses  have  been  shaped  by  the  colleges 
and  universities  to  suit  their  own  supposed  or  actual 
needs.  Social  efficiency  and  ample  return  on  the  moneys 
invested  demand  that  the  curricula  of  secondary  schools 
be  first  made  for  the  98  per  cent,  of  their  students  and 
that  the  colleges  and  universities  then  adapt  themselves 
to  these  courses. 

A  reorganization  of  secondary  schools  that  will  make 
them  more  useful  while  preserving  their  cultural  value 
will  do  much  to  entice  a  larger  percentage  of  pupils  to 
continue  therein.  In  the  elementary  public  schools  of 
New  York  City  there  are  approximately  661,000  stu- 
dents, reported  Mayor  Mitchel  recently.  "Out  of  this 
great  number  but  41,000  qualified  for,  and  approximately 
but  23,000  actually  entered,  the  high  schools.  And  in  the 

1  Beard :    American   City   Government,   p.   322. 


296  LOWER  LIVING  COSTS  IN  CITIES 

fourth  year,  the  year  of  graduation  from  the  high  school, 
but  4,079  survived."  Such  is  typical  of  the  mortality  in 
other  cities.  If  education  is  to  continue  up  to  the  age  of 
eighteen,  as  it  must  if  it  is  to  create  an  efficient  producer, 
a  reorganization  of  secondary  schools  is  clearly  necessi- 
tated. 

This  reorganization  is  not  synonymous  with  the  re- 
making of  our  high  schools  into  trade  schools.  It  need 
not  necessarily  mean  that  the  time  given  to  dead  lan- 
guages be  materially  reduced.  There  can  and  must  be, 
however,  a  vitalization  of  the  curriculum  and  a  sociali- 
zation of  the  instruction  both  in  method  and  in  content. 

No  theories  need  be  advanced  as  to  what  shape  this 
reorganization  should  take.  The  shape  that  it  will  take 
is  clearly  indicated  in  the  preliminary  statements  made 
by  the  Chairman  of  the  Commission  of  the  National  Edu- 
cation Association  on  the  Reorganization  of  Second- 
ary Education.  This  commission  appointed  twelve 
committees  on  English,  Social  Studies,  Natural  Sciences, 
Ancient  Languages,  Modern  Languages,  Household 
Arts,  Manual  Arts,  Music,  Business,  Agriculture,  and 
on  the  Articulation  of  High  School  and  College.  These 
twelve  committees  have  separately  had  their  meetings 
and  through  a  chairman  have  summarized  the  plans  of 
their  several  committees  and  the  results  to  be  secured. 
A  resume  of  these  will  indicate  the  tendencies  in  the 
reorganization  of  secondary  education.  The  Committee 
on  English  states  its  aims  as  follows:  "Broadly  speak- 
ing, it  should  be  the  purpose  of  every  English  teacher, 
first,  to  quicken  the  spirit  and  kindle  the  mind  and  imagi- 
nation of  his  pupils,  and  to  develop  habits  of  weighing 
and  judging  human  conduct  with  the  hope  of  leading 
them  to  higher  living;  second,  to  supply  the  pupils  with 
an  effective  tool  for  use  in  their  future  private  and 
public  life — i.  e.,  the  best  command  of  language  which, 


EDUCATION:  COSTS  VERSUS  RESULTS      297 

under  the  circumstances,  can  be  given  them."  The  state- 
ment by  the  Chairman  of  the  Committee  on  Social  Studies 
has  already  been  given.  The  chairman  of  the  Committee 
on  Natural  Sciences  states:  "It  is  of  the  utmost  im- 
portance that  the  pupil  should  gain  power  to  apply  the 
facts  and  principles  of  science  and  to  interpret  natural 
phenomena.  For  this  reason  the  teacher  of  science 
should  draw  largely  from  material  found  in  the  en- 
vironment and  should  by  no  means  confine  attention  to 
the  statements  in  the  textbook  or  to  the  laboratory  ex- 
ercises." The  statement  of  the  Chairman  of  the  Com- 
mittee on  Ancient  Languages  includes  the  following: 
"We  have  just  asked  ourselves  what  are  the  aims  of 
Latin  teaching?  The  following  are  some  of  the  aims 
which  seem  worth  while :  To  enrich  the  English  vocabu- 
lary, both  by  the  addition  of  new  words  and  particularly 
by  a  more  perfect  mastery  and  clear  understanding  of 
many  of  the  words  already  in  use ;  to  develop  an  appre- 
ciation of  word,  phrase,  and  clause  relations ;  to  teach 
clearness  and  accuracy  of  expression,  both  oral  and  writ- 
ten ;  to  develop  habits  of  industry  and  application ;  to 
make  the  pupil  an  intelligent  critic  of  his  own  oral  and 
written  speech  and  that  of  others;  to  lay  a  good  foun- 
dation for  the  study  of  English  and  of  other  modern 
languages ;  to  read  some  of  the  great  Latin  masterpieces ; 
'to  give  a  wider  view  of  life  through  familiarity  with  a 
great  civilization  remote  from  the  present,  both  in  place 
and  time,  in  the  cool,  calm  air  of  non-contemporaneous 
events.' " 

The  three  aims  of  modern  language  instruction,  says 
the  Chairman  of  the  Committee  on  Modern  Languages, 
are:  (i)  "To  secure  a  reasonable  degree  of  phonetic 
accuracy  and  lead  the  pupil  to  feel  its  importance."  (2) 
"To  teach  precision  in  the  use  of  words  and  to  give  a 
clear  understanding  of  grammatical  relations  and  of  the 


298  LOWER  LIVING  COSTS  IN  CITIES 

common  terms  which  state  them,  showing  why  such 
terms  are  necessary."  (3)  "To  stimulate  the  pupil's 
interest  in  the  foreign  nation,  leading  him  to  perceive 
that  the  strange  sounds  are  but  new  ways  of  communi- 
cating thoughts  quite  like  his  own ;  showing  him  by  the 
close  resemblances  in  words  and  viewpoints  that  the 
German  and  the  Frenchman  are  his  kinsmen,  with  in- 
terests, ambitions,  and  hopes  like  his  own;  revealing  to 
him  that  their  tales  can  give  him  pleasure,  their  wisdom 
can  enlighten  him." 

"It  is  the  purpose  of  the  group  of  courses  offered 
under  Household  Arts,"  says  the  Chairman  of  the  Com- 
mittee on  Household  Arts,  "to  prepare  girls  not  only 
to  become  better  homemakers,  but  to  make  them  more 
intelligent  concerning  those  occupations  which  were  for- 
merly a  part  of  every  home  but  have  recently  been  taken 
from  the  home,  and  to  give  them  an  appreciation  of  the 
factors  that  make  up  the  municipal  environment,  and  of 
the  influence  of  these  on  the  home." 

The  statement  of  the  Chairman  of  the  Committee  on 
Manual  Arts  is  as  follows :  The  Committee  believes  "that 
all  high-school  subjects  should  be  given  with  a  much 
clearer  conception  of  the  provisional  destination  of  the 
pupil,  or  at  least  with  a  fuller  knowledge  of  his  educa- 
tional program,  with  a  consequent  increase  in  definite- 
ness  of  purpose.  ...  If  regard  is  to  be  had  to  the  'des- 
tination' of  the  pupil,  numerous  questions  at  once  arise 
as  to  the  possibility  of  adjusting  school  work  to  what 
is  to  be  encountered  at  the  end  of  the  course.  In  the 
past  the  chief  questions  of  articulation  have  been  those 
which  concerned  jointly  the  high  school  and  the  college, 
but  to-day  direct  articulation  is  made  also  with  voca- 
tional life.  Thus  vocational  guidance  and  training  are 
coming  to  be  of  prime  importance  to  the  great  majority 
of  high-school  pupils,  and  consequently  factors  to  be 


EDUCATION:  COSTS  VERSUS  RESULTS      299 

taken  into  account  in  any  solution  of  the  problems  be- 
fore the  committee." 

"The  qualities  of  thought  and  feeling,"  says  the  Chair- 
man of  the  Committee  on  Music,  "out  of  which  good 
music  springs  are  highly  desirable.  They  reflect  a  de- 
sire for  beauty;  they  reveal  the  spirit  of  man  in  its 
more  profound  and  universal  relations  and  impulses." 

The  aim  of  the  commercial  course,  the  Chairman  of 
the  Committee  on  Business  states  to  be :  ( I )  "To  provide 
the  student  with  the  proper  physical  equipment,  through 
instruction  in  physiology,  hygiene,  and  by  physical  train- 
ing." (2)  "To  provide  instruction  in  citizenship, 
through  courses  in  civics  and  through  social  organiza- 
tion of  the  school."  (3)  "To  lay  the  foundation  for  a 
broad  appreciation  of  life,  through  courses  in  science, 
literature,  art,  music,  etc.  The  special  aim  of  the  com- 
mercial course  is  to  enable  the  student  to  fill  a  place  in 
commercial  life.  The  course  should  be  so  planned  as  to 
equip  the  student  to  earn  his  livelihood  immediately,  in 
case  he  leaves  before  completion  of  the  course,  and  also 
to  equip  him  to  fill  more  responsible  positions  as  they 
may  offer  in  the  future." 


DEMOCRATIZATION  OF  HIGHER  EDUCATION 

If  higher  education  is  worth  the  millions  of  dollars  it 
costs,  it  must  have  a  community  value.  Community  re- 
turns for  community  expenditures  in  higher  educational 
institutions  come  through  the  democratization  of  knowl- 
edge and  through  the  democratization  of  the  services 
of  the  members  of  their  faculties.  This  applies  with 
equal  force  fulness  to  endowed  as  to  public  institu- 
tions. "Universities,"  said  Hon.  James  Bryce,  in  an 
address  delivered  before  the  University  of  California, 


300  LOWER  LIVING  COSTS  IN  CITIES 

"are  lamps  which  cast  forth  their  light  on  everything 
around  them.  Not  only  ought  they  to  distribute  infor- 
mation on  scientific  phenomena  and  processes  applica- 
ble to  agriculture  and  other  industries,  as  some  state 
universities  have  done  with  eminent  success,  they  ought 
also  to  place  their  knowledge  of  economic  history  and  of 
the  economic  conditions  of  other  countries,  and  of  the 
experiments,  whether  made  in  those  countries  by  legis- 
lative or  by  voluntary  action,  at  the  disposal  of  the  ad- 
ministrative officials  and  the  legislature  of  their  state. 
When  any  investigation  is  needed,  either  of  a  scientific 
or  historical  or  economic  kind,  they  can  furnish  from 
among  their  teaching  staff  trained  investigators  whose 
wide  range  of  knowledge  and  mastery  of  method  will 
make  them  valuable  colleagues  of  the  practical  men 
who  also  may  be  charged  with  the  conduct  of  such  in- 
quiries." 

The  democratization  of  higher  educational  institu- 
tions means  (i)  departments  of  correspondence;  (2) 
departments  of  instruction  by  lectures;  (3)  readjust- 
ment in  courses  of  instruction;  (4)  public  service  bu- 
reaus with  such  divisions  as  legislative  reference,  mu- 
nicipal reference,  sanitary  engineering,  social  sciences, 
and  general  information  and  welfare;  (5)  the  recogni- 
tion of  the  principle  that  the  faculties  of  higher  educa- 
tional institutions,  within  their  respective  specialties,  are 
expected  to  render  service  to  public  officials,  civic  bodies, 
and  to  their  communities  within  reasonable  limits  of 
their  time  and  energies. 

The  correspondence  departments,  started  in  the  east- 
ern states,  have  reached  their  fullest  development  in  the 
Department  of  Correspondence  Study  conducted  by  the 
University  of  Wisconsin.  This  department  offers  courses 
in  agriculture,  business  and  industry,  engineering  (elec- 
trical, mechanical,  civil),  mechanical  drawing,  surveying, 


EDUCATION:  COSTS  VERSUS  RESULTS      301 

highway  construction,  the  modern  languages,  history, 
political  economy,  political  science,  sociology,  philosophy, 
education,  mathematics,  English  language  and  litera- 
ture, physical  sciences  (bacteriology,  botany,  physiology, 
geography,  geology,  chemistry,  astronomy),  law,  phar- 
macy, music,  home  economics  and  teachers'  reviews. 

The  department  of  instruction  by  lectures  to  be  ef- 
fective must  include  more  than  polite  lectures  given  in 
semi-formal  fashion  in  or  about  the  university  or  college 
grounds.  It  must  mean  the  carrying  of  instruction  in 
definite  fields  out  to  the  people  in  their  own  communi- 
ties. The  work  of  the  agricultural  schools  in  their 
special  lecture  trains  is  quite  to  the  point  as  illustrating 
what  can  be  done  in  the  democratization  of  the  results 
obtained  by  special  students  and  experts.  Of  similar 
significance  is  the  education  of  small  shopkeepers  as 
undertaken  during  Retail  Merchants'  Week,  conducted 
jointly  by  the  Wharton  School  of  the  University  of 
Pennsylvania  and  the  Department  of  Public  Works  of 
the  City  of  Philadelphia.  In  this  short  course  the  prob- 
lems of  the  retail  merchants  in  buying  and  selling  and 
in  conducting  their  business  were  discussed  by  experts. 
The  public  evening  lectures  in  New  York  City,  a  plan 
that  has  been  adopted  in  some  form  or  other  in  Los 
Angeles,  San  Francisco,  New  Orleans,  Worcester,  St. 
Louis,  Columbus,  Memphis,  and  other  representative 
cities,  are  also  proving  of  significant  social  and  educa- 
tional value.  The  speakers  here — not  all,  but  a  large  per- 
centage of  them — are  university  and  college  men.  In 
1910  more  than  one  hundred  courses  ,were  given  and 
there  was  an  aggregate  attendance  of  nearly  1,000,000. 

The  readjustment  in  the  curricula  of  higher  educa- 
tional institutions  does  not  mean  that  there  should  be 
no  "required"  courses.  It  does  mean,  however,  that  all  of 
the  students  shall  be  brought  into  close  touch  with  the 


302  LOWER  LIVING  COSTS  IN  CITIES 

social  sciences ;  and  that  history,  chemistry,  physics,  and 
the  other  sciences,  shall  be  so  taught  as  to  be  related  to 
vital  problems  in  the  social  and  industrial  world. 

A  poignant  method  of  democratizing  the  knowledge  of 
the  higher  educational  institutions  is  through  bureaus  of 
public  service.  These  bureaus  have  been  organized  in 
a  number  of  universities,  such  as  the  universities  of  Ore- 
gon, Texas,  Washington,  California,  Wisconsin,  Cin- 
cinnati, Harvard,  Kansas,  and  Iowa.  These  bureaus 
utilize  the  libraries,  laboratories  and  the  knowledge  of 
the  experts  of  their  respective  institutions. 

To  be  the  most  effective  teachers,  certainly  the  major 
portion  of  the  faculties  of  higher  institutions  must  be 
specialists.  To  be  effective  specialists,  however,  either 
in  the  pure  sciences  or  in  the  social  sciences,  their  work 
must  be  related  to  the  problems  of  their  time.  This  is 
assured  and  a  maximum  of  personal  usefulness  is  at- 
tained when  such  faculty  members  are  subject  to  expert 
service  for  their  communities.  More  than  this,  that 
specialist  is  the  most  effective  teacher  who  is  daily  in 
contact  with  the  problems  with  which  many,  if  not  all, 
of  his  students  will  later  directly  or  indirectly  be  thrown 
into  contact.  There  is  still  a  place,  to  be  sure,  for  the 
closet  thinker,  but  for  specialists  who  are  also  teachers, 
maximum  usefulness  to  their  students,  to  their  com- 
munities and  to  the  institutions  they  serve  comes  only 
when  their  work  is  shot  through  and  through  with  the 
spirit  and  practice  of  public  service.  This  need  has 
been  reflected  by  the  report  issued  by  the  Committee 
on  Practical  Training  for  Public  Service  to  the  Ameri- 
can Political  Science  Association  at  its  Washington 
meeting,  January  I,  1914,  and  by  the  National  Confer- 
ence on  University  and  Public  Service  held  in  New  York 
City  in  May,  1914,  and  through  the  movement  on  foot 
among  graduate  faculties  of  universities  and  colleges  to 


EDUCATION:  COSTS  VERSUS  RESULTS      303 

place  graduate  students  in  practical  work  and  in  touch 
with  administrative  bureaus,  whether  governmental,  in- 
dustrial or  civic. 

Through  such  practical  democratization  of  service  and 
expert  knowledge  do  our  higher  educational  institutions 
amply  reward  their  communities  for  the  heavy  financial 
levies  necessary  to  support  them.  Through  the  democ- 
ratization of  higher  educational  institutions,  there  is 
thus  effectiveness  in  service  and  efficiency  in  the  educa- 
tional training  of  students. 


EFFICIENT  UTILIZATION  OF  THE  SCHOOL  PLANT 

There  remains  the  efficient  utilization  of  the  school 
and  college  buildings  and  grounds.  Built  at  community 
expense,  they  should  be  used  up  to  100  per  cent,  of  their 
availability  for  recreational,  educational  and  civic  activi- 
ties. Without  such  use,  the  public  school  plant  func- 
tions only  in  part  and  that  in  a  parental  way.  With  this 
extended  service  it  functions  fraternally  as  well.  And 
this  extension  of  usefulness  means  more  than  a  saving 
in  funds  to  those  who  must  otherwise  hire  halls  and 
grounds;  it  means  more  than  opportunity  for  civic,  so- 
cial and  recreational  activities  under  wholesome  sur- 
roundings. It  means  the  upbuilding  of  a  community 
fraternal  spirit;  it  means  broadening  the  foundations  of 
a  democracy.  School  buildings  should  be  so  planned 
as  to  provide  adequately  for  neighborhood  activities. 
The  use  of  expensive  school  buildings  for  only  six  hours 
a  day  for  only  200  days  a  year  is  uneconomical,  to  say 
the  least. 

And,  finally,  the  efficient  utilization  of  our  school 
plants,  facilities  and  faculties  requires  a  cooperative  spirit 
among  all  the  social  and  industrial  institutions  of  the 


304  LOWER  LIVING  COSTS  IN  CITIES 

community.  If  the  schools  are  to  give  in  more  direc- 
tions, they  must  also  receive  in  more  directions.  The 
duty  to  give  and  to  receive  from  more  directions  applies 
equally  to  the  church,  the  library,  the  club,  the  museum, 
the  public  official,  the  business  organization,  the  business 
man  and  the  private  individual.  Mutual  cooperation 
will  make  for  economy  and  usefulness.  With  such  co- 
operation the  school  and  the  school  plant  will  return  to 
the  community  full  value  and  more  than  full  value  for 
all  they  cost. 


CHAPTER   XVIII 
LOWER  UTILITY   COSTS 

Approximately  eleven  billion  dollars  in  capital  are  in- 
vested in  municipal  utilities.  Upon  this  vast  sum  the 
people  of  the  United  States,  and  primarily  the  urban 
dwellers,  are  expected  to  pay  adequate  returns. 

Of  this  eleven  billion  dollars,  over  eight  billions  are 
invested  in  electric,  gas,  street  and  interurban  railway 
companies,1  of  which  sum  two  billions  ($2,052,494,697) 2 
are  in  electric  light  and  power  companies,  over  one  and 
one-third  billions  in  artificial  gas  companies 3  and  ap- 
proximately five  billions  4  in  street  and  interurban  railway 
companies.  Another  billion  and  a  quarter  of  dollars  are 

1  From  a  brief  submitted  on  behalf  of  public  utility  holding 
companies  to  the  Interstate  Commerce  Committee  of  the  United 
States  Senate,  in  the  matter  of  Senate  bill  No.  4150,  by  William 
P.  Bonbright  &  Co.  and  other  firms  interested  in  holding  com- 
panies. 

*  This  was  the  amount  in  1912,  according  to  the  report  of 
the  National  Census  Bureau  on  "Central  Electric  Light  and 
Power  Stations,"  Bulletin  124.  Commercial  companies  only  are 
included. 

3  The  Report  of  the  Bureau  of  Census  for  1910  on  "Statistics 
for  the   Manufacture   of   Gas"   gave  the   capitalization   of   the 
artificial  gas  companies  reporting  to  the  Census  Bureau  as  $915,- 
536,762  in  1909. 

4  $4,708,568,141,  according  to  the  report  of  the  National  Cen- 
sus Bureau  in  Bulletin  124,  1912,  p.  66,  on  "Street  and  Electric 
Railways."     There  are,  no  doubt,  certain  small  companies  that 
did  not  report  to  the  Bureau. 

305 


306  LOWER  LIVING  COSTS  IN  CITIES 

invested  in  telephones.1  Cities  of  the  United  States  of 
over  30,000  in  population,  alone,  own  over  one  and  one- 
quarter  billion  dollars  of  lands,  buildings  and  equip- 
ment used  in  public  service  enterprises.2  The  total  was 
$1,326,158,240,  of  which  $909,591,279  was  for  water 
supply  systems,  and  $416,566,961  for  "other  public  ser- 
vice enterprises."  What  these  "other  public  service 
enterprises"  include  may  be  inferred  from  the  items 
enumerated  in  the  census  report  for  1910.  According  to 
this  report  of  the  $1,144,007,040  invested  in  public  ser- 
vice enterprises  in  these  cities,  $783,126,016  went  for 
water  supply  systems.  The  items  were: 

Water  supply  systems $783,126,016 

Electric  light  and  power  and  gas  supply 

systems 20,125,105 

Markets  and  public  scales 25,100,341 

Docks,  wharves  and  landings 123,826,580 

Cemeteries  and  crematories 13,913,419 

All  other 177,9*5,579 

To  be  added  to  the  $20,125,105  for  electric  and  gas  sys- 
tems was  another  item  of  $9,797,643  listed  under  munici- 
pal service  enterprises.  Cities  with  a  population  of  from 
8,000  to  25,000  owned,  over  a  decade  ago  (1903),  ap- 
proximately $75,000,000  in  water  works  ($67,446,783) 

1  Prof.  E.  W.  Bemis  reported  the  maintenance,  reconstruction 
and  plant  investment  of  all  the  Bell  Telephone  companies  alone 
in  the  United  States  to  be,  in  1911,  $666,660,702.  (See  Report 
on  the  Investigation  of  the  Chicago  Telephone  Company,  sub- 
mitted to  the  Committee  on  Gas,  Oil  and  Electric  Light  of  the 
City  Council  of  Chicago,  p.  54.)  The  property  value  reported 
in  the  World  Almanac  for  Bell  telephones  in  1914  was  $850,- 
831,158,  while  the  property  value  for  the  15,000  independent  com- 
panies reported  therein,  operating  over  4,000,000  telephones,  was 
approximately  $400,000,000. 

*  According  to  the  Census  Bulletin  on  Financial  Statistics  for 
Cities  of  over  30,000,  p.  62  (1912). 


LOWER  UTILITY  COSTS  307 

and  electric  light  plants  C$5,439,747).1  Since  this  report 
appeared,  these  cities  have  added  quite  extensively  to 
their  municipally  owned  and  operated  public  services, 
so  that,  including  other  small  cities,  it  is  safe  to  say 
that  cities  under  30,000  have  invested  in  municipally 
owned  and  operated  public  utilities  approximately  one 
hundred  and  fifty  million  dollars. 

Here  is  a  known  total  of  over  $10,650,000,000.  In 
addition  to  these  utilities,  vast  sums  are  invested  in  pri- 
vate water  plants,  in  natural  gas  plants  and  in  steam 
heating  plants.  Moreover,  unquestionably  numerous 
stations  and  plants,  both  private  and  public,  have  not 
reported  in  any  of  the  available  sources.  The  eleven 
billion  dollars  as  an  approximate  estimate  of  the  capi- 
tal invested  in  municipal  utilities  upon  which  urban 
dwellers  primarily  must  pay  an  adequate  return  is, 
therefore,  a  conservative  estimate. 

Even  more  significant  than  the  vast  amount  of  capital 
invested  in  public  utilities  is  the  rapid  increase  in  the 
total  capitalization  of  such  concerns.  The  capitaliza- 
tion of  electric  companies  alone  increased  103  per  cent, 
from  1902  ($2,308,282,099)  to  1912  ($4,708,568,141). 
According  to  charts  submitted  to  investors  by  Henry 
L.  Doherty  &  Company,  of  New  York  City,2  the  se- 
curities of  gas  and  electric  companies  outstanding  in- 
creased no  per  cent,  from  1902-1911,  as  compared  with 
an  increase  of  slightly  over  50  per  cent,  for  steam  rail- 
roads and  around  15  per  cent,  for  industrials.  Of  equal 
significance  is  a  similar  chart,  published  by  this  com- 
pany, showing  that  the  net  earnings  of  gas  and  electric 
companies  increased  100  per  cent,  from  1902-1911,  with 
a  steady  increase,  while  the  net  earnings  of  railroads 
spasmodically  increased  up  to  40  per  cent.,  rising  slightly 

1  Census  Report  for  1903,  p.  196. 

2  Copyrighted,  and  noted  here  with  special  permission. 


308  LOWER  LIVING  COSTS  IN  CITIES 

above  that  in  1910,  whereas  the  net  earnings  for  indus- 
trials showed  rapid  fluctuations  above  and  below  the 
net  earnings  for  1902. 

Vast,  indeed,  are  the  sums  paid  by  consumers  in  sup- 
porting this  tremendous  capitalization.  The  total  income 
for  light,  heat  and  power  to  both  commercial  and  mu- 
nicipal central  electric  stations  was  $302,115,599  in  1912, 
an  increase  of  252.5  per  cent,  over  the  total  income  for 
I9O2.1  Of  this  sum  3,837,518  consumers  paid  $221,- 
200,466  for  commercial  light,  power  and  heat;  $27,273,- 
226  went  for  municipal  street  lighting,  and  $2,504,511  to 
the  lighting  of  municipal  buildings.2 

In  1912  3,311,870  customers  of  commercial  central 
electric  stations  paid  $205,973,946  for  their  light,  heat 
and  power,  and  525,648  consumers  of  municipal  plants 
paid  $15,226,520  for  their  light,  heat  and  power.  Con- 
siderably over  75,000,000  lamps  are  wired  for  service 
by  municipal  central  and  commercial  central  electric  sta- 
tions.3 Slightly  over  twelve  billion  (12,135,341,716) 
passengers  paid  over  half  a  billion  dollars  ($520,184,773) 
to  street  railway  companies  in  that  same  year.4  On  the 

1  Total  income  for  1902,  1907,   1912,  p.   14,  Table  i,  Bulletin 
124,   Department  of  Commerce,   Bureau  of  the  Census :     1902, 
$85,700,605;  1907,  $175,642,338;  1912,  $302,115,599. 

2  Current  sold  to  other  public  utilities,  $31,019,660,  while  the 
estimated    value    of    free    service    to    commercial    stations    was 
$513,644;  to  municipal  stations,  $4,469,351. 

3  Estimated  number  of  lamps  wired  for  service  in  1912 :   Com- 
mercial central:  arc,  413,544;   incandescent,  69,428,356.     Munici- 
pal central:  arc,  91,851;  incandescent,  7,057,849. — Census  Bulletin 
124,  p.  14. 

«  STREET  RAILWAYS 

PASSENGERS  CARRIED 

1912                      1907  1902 

12,135.341.716        9,533,080,766  5,836,615,296 

Revenue 9,545,554,66?          7,441,  H4,5o8  4,774,211,904 

Transfer 2,423,918,024          1,995,658,101  1,062,403,392 

Free 165,869,025              96,308,157  Not  available 


LOWER  UTILITY  COSTS  309 

basis  of  a  per  capita  expenditure  of  $5  for  every  dollar 
of  new  annual  revenue  for  a  utility  (this  ratio  applies 
especially  to  electric  utilities)  consumers  are  paying  over 
two  billion  dollars  annually  for  their  municipal  utilities. 

That  the  problem  of  utility  costs  is  not  only  a  press- 
ing but  an  increasingly  important  one  is  clearly  revealed 
by  the  figures  showing  the  phenomenal  increase  in  the 
amounts  paid  in  the  last  decade  for  certain  utilities. 
The  amount  paid  to  electric  companies  for  light,  heat 
and  power  increased  from  $85,700,000  in  1902  to  over 
$302,000,000  in  1912.  That  this  increase  is  not  pe- 
culiar to  electrical  companies  but  may  be  expected  for 
years  to  come  in  other  utilities  as  well  is  indicated  by 
a  statement  in  the  brief  submitted  on  behalf  of  holding 
companies  x  which  states  that :  "New  capital  at  the  rate 
of  approximately  $400,000,000  per  year — $8,000,000  per 
week — will  be  required"  in  electric,  gas  and  street  rail- 
way companies  "for  several  years  to  come  if  the  present 
rate  of  progress  is  to  be  maintained."  The  amount  paid 
in  street  railway  fares  increased  during  this  same  de- 
cade from  $236,000,000  to  $520,000.000. 

What  lowered  costs  mean  is  shown  by  the  fact  that 
even  a  5  per  cent,  decrease  in  existing  electric  rates  would 
mean  a  saving  to  American  citizens  of  over  $15,000,000 

STREET  RAILWAYS  (Continued) 

MILES  OF  TRACK  OPERATED 

1912  1907  1902 

41,064.82  34,381.51  22,572.52 

TRANSPORTATION  REVENUES 

1912  1907  1902 

1520,184,773  $390,276,347  $235,997.005 

NON-TRANSPORTATION  REVENUES 

1912  1907  1902 

47.326,931  27,911,511  11,556,994 

Bulletin  124,  Department  of  Commerce,  Bureau  of  the  Census,  1912  pp.  66  and 
86. 

1  Brief  submitted  on  behalf  of  Public  Utility  Holding  Com- 
panies to  the  Interstate  Commerce  Committee  of  the  United 
States  Senate  in  the  matter  of  Senate  Bill  '4160. 


310  LOWER  LIVING  COSTS  IN  CITIES 

annually.  The  estimated  annual  savings  to  car  riders  in 
the  city  of  Cleveland  by  the  reduction  of  street  fares 
of  one  cent  for  transfers,  with  a  periodic  charge,  as  has 
been  required  by  ordinance  to  keep  a  reserve  fund  up  to 
a  certain  point,  is  $4,000,000  annually,  an  income,  at  5 
per  cent.,  on  over  $80,000,000. 

The  interests  of  the  urban  dweller  in  cost  and  service 
standards  of  the  city's  utilities  do  not  end  with  the  sums 
he  must  pay  for  such  services.  Upon  the  adequacy  and 
purity  of  the  water  supply  depend  his  home  comforts 
and  his  health.  Fuel  expenses  and  conveniences,  and 
the  sufficiency  and  satisfaction  in  the  lighting  of  his  home 
depend  upon  the  quality  and  uniformity  in  pressure  of  the 
gas  furnished  by  the  gas  company.  On  the  continuity 
of  service  and  the  standard  of  fixtures  furnished  by  the 
electric  light  company  depend  home  conveniences,  work- 
ing facilities  and  safety  from  fire.  For  business  effi- 
ciency and  home  comforts  the  urban  dweller  must  rely 
upon  the  adequacy  of  the  service  furnished  by  the  tele- 
phone company.  The  facilities  for  reaching  employ- 
ment, the  location  of  the  home,  the  time  spent  in  transit 
and  in  overcrowded  cars  all  depend  upon  the  service 
standards  and  the  efficiency  of  the  street  railway  com- 
pany. The  municipal  utilities  create,  over  the  entire 
city,  a  network  of  wires  and  pipes  that  levy  a  tribute  not 
only  upon  the  pocketbook  but  upon  the  convenience  and 
happiness  of  the  city  dweller,  and  make  a  city  either 
unsightly  or  beautiful,  and  streets  passable  or  unsafe, 
as  the  managers  of  the  utility  companies  may  decree. 

Upon  the  public  utilities  depend  land  values;  and  the 
extension  of  those  utilities  indicate  in  what  sections  of 
the  city  growth  can  be  expected.  More  than  this,  the 
very  efficiency  of  city  government,  the  type  of  man  in 
the  city  legislature  and  in  the  city's  executive  office,  hinge 
all  too  often  upon  the  wishes  of  the  public  utility  com- 


LOWER  UTILITY  COSTS  311 

panics,  whose  first  aim  is  to  protect  their  franchises  and 
franchise  values.  Weary  pages  of  the  history  of  prac- 
tically every  American  city  recount  the  debauchment  of 
city  officials  for  sordid  utility  purposes.  The  city's  utili- 
ties are  indeed  the  city's  second  nature  and  heavy  is  the 
tribute  they  levy  upon  every  home. 

This  one  principle  should  stand  out  clearly:  The  ur- 
ban resident  must  have  these  utilities  furnished  under 
adequate  service  standards  at  prices  that  provide  a  rea- 
sonable return  upon  the  actual  costs  of  furnishing  those 
services. 

As  self-evident  and  as  important  as  this  principle  is, 
it  is  crystal  clear  to  all  familiar  with  utility  prices  and 
standards  that  few  indeed  are  the  American  cities  where 
it  is  put  into  practice. 

Before  entering  into  a  discussion  as  to  the  public  poli- 
cies essential  to  attaining  this  standard  for  municipal 
utilities,  it  is  necessary  to  consider  some  of  the  actual 
conditions  as  to  those  utilities  which  now  prevail.  The 
big  policy-determining  factors  in  an  adequate  and  con- 
structive program  for  municipal  utilities  are: 

(1)  The  capitalization  of  municipal  utilities  is  still 
based   largely   on   "future  values"   or   "future   earning 
power"  and  not  on  actual  investment  or  replacement 
values;  , 

(2)  The  major  portion  of  municipal  utilities  is  owned 
and  operated  by  huge  holding  companies; 

(3)  American  cities  do  not  have  the  powers  essential 
to  complete  control  over  their  own  utilities; 

(4)  Each  city  or  community  is  becoming  more  and 
more  dependent  upon  the  efficiency  of  the  utilities  fur- 
nished for  or  running  through   other  cities  and  com- 
munities. 

The  attitude  of  the  owner  of  utility  properties  is  still 
shot  through  and  through  with  the  conception  that  those 


312  LOWER  LIVING  COSTS  IN  CITIES 

properties  are  in  the  same  category  as  private  business 
and  hence  their  capitalization  may  be  based  on  future 
values  or  future  earning  power.  This  point  of  view  was 
clearly  put  very  recently  by  President  Mellen  of  the 
New  York,  New  Haven  and  Hartford  Railroad  in  his 
testimony  before  the  Interstate  Commerce  Commission 
when  he  replied  to  the  question :  "So  you  paid  $19,000,000 
or  $20,000,000  for  property  (trolley  lines)  worth  about 
$8,000,000?"  by  saying:  "I  do  not  accept  your  valuation 
of  $8,000,000.  The  sum  we  paid  was  the  value  of  the 
trolleys."  "How  do  you  estimate  the  value  in  a  case 
like  that?"  "When  I  value  a  purchase,  I  consider  its 
prospective  value;  what  it  will  ultimately  be  worth." 
Illustrations  as  to  overcapitalization  and  the  watering" 
of  utility  stock  are  familiar  to  every  reader.  If  illustra- 
tions be  needed  to  show  the  extent  of  overcapitalization 
and  watering  of  stock,  the  following  comparisons  of  the 
fair  value  fixed  by  certain  public  service  commissions 
with  the  par  value  of  the  stocks  and  bonds  issued  by  cer- 
tain companies,  and  with  the  values  claimed  by  those 
companies  on  which  they  should  be  allowed  to  earn  a  fair 
return,  will  be  ample.  The  Public  Service  Commission 
of  the  Second  District,  New  York,  in  1913,  fixed  the 
fair  value  of  the  Buffalo  General  Electric  Company  at 
$3,194,159.  The  par  value  of  the  stocks 'and  bonds  that 
had  been  issued  by  this  company  and  upon  which  they 
expected  to  levy  tribute  and  to  pay  returns  was  $6,- 
912,000  or  116  per  cent,  more  than  the  fair  value  fixed 
by  the  Commission.  The  company  claimed  a  value  of 
$6,166,140,  or  93  per  cent,  more  than  the  fair  value  fixed 
by  the  Commission.  This  same  Commission  found  the 
fair  value  of  the  Cataract  Power  and  Circuit  Company  to 
be  $2,287,582.  The  company  had  issued  stocks  and  bonds 
($3,384,000)  47  per  cent,  greater,  and  claimed  a  value 
($5,988,913)  of  161  per  cent,  more  than  this  amount. 


LOWER  UTILITY  COSTS  313 

The  Union  Electric  Light  and  Power  Company  claimed 
a  value  of  $24,072,502,  which  was  41  per  cent,  greater 
than  the  value  fixed  by  the  Public  Service  Commis- 
sion of  St.  Louis  ($17,015,466).  The  company  had  is- 
sued stocks  and  bonds  to  the  amount  of  $26,956,000, 
58  per  cent,  greater  than  the  value  fixed  by  the  Com- 
mission. The  Wisconsin  Railroad  Commission  fixed  a 
value  of  $1,646,893  for  the  Superior  Water,  Light 
and  Power  Company.  The  company  had  claimed  a 
value  of  $1,991,027,  21  per  cent,  in  excess  of  the  value 
fixed  by  the  Commission,  and  had  issued  stocks  and 
bonds  to  the  amount  of  $2,800,000,  70  per  cent,  in  excess 
of  the  Commission's  estimate.  The  Public  Service  Com- 
mission of  the  First  District,  New  York,  fixed  the  fair 
value  of  the  Queens  Borough  Gas  and  Electric  Company 
at  $1,660,000.  The  company  had  claimed  no  value  but 
had  agreed  to  accept  the  Commission's  book  value, 
$3>559>8°2>  which  was  114  per  cent,  higher  than  the 
value  fixed  by  the  Commission.  The  company  had  issued 
stocks  and  bonds  to  the  amount  of  $3,600,000 — 116  per 
cent,  in  excess  of  the  Commission's  valuation. 

Capitalizing  utilities  on  future  values  means,  in  effect, 
that  the  city  dweller  is  to  pay  returns,  not  only  on  actual 
values,  but  also  on  such  imaginary  values  as  silver- 
tongued  stock  promoters  and  investment  bankers  can 
create. 

The  magnitude  of  the  interests  involved  and  the  large 
amount  of  capital  invested  in  holding  companies  have 
been  set  forth  accurately,  it  may  be  assumed,  in  the 
brief  submitted  on  behalf  of  Public  Utility  Holding 
Companies  to  the  Interstate  Commerce  Committee  of 
the  United  States  Senate.  This  brief  shows  that,  of  the 
$8,000,000,000  or  more  "of  capital  employed  in  electric, 
gas,  street  and  interurban  railway  companies,"  nearly 
five  and  a  half  billion  dollars  are  controlled  by  holding 


314  LOWER  LIVING  COSTS  IN  CITIES 

companies  and  their  subsidiary  companies.  "Of  the  ap- 
proximately eighty-nine  millions  of  people  served  by 
Electric  Light  and  Power  and  Gas  Companies  over  sixty- 
two  millions  (approximately  70  per  cent.)  are  served 
by  holding  company  systems."  Holding  companies  con- 
trol 76  per  cent,  of  the  two  billion  dollars  of  capital  in- 
vested in  electric  light  and  power  companies ;  two-thirds 
of  the  one  and  one-third  billion  dollars  in  artificial  gas 
companies  and  two-thirds  of  the  five  billion  dollars  of 
capital  in  street  and  interurban  railway  companies.  "In 
the  twenty-eight  cities  of  the  United  States  having  a 
population  in  excess  of  200,000,  the  street  railway  mile- 
age controlled  by  holding  companies  is  in  excess  of  61 
per  cent."  *  Of  the  72.6  per  cent,  increase  in  the  total 
income  of  commercial  electric  stations  in  the  five-year 
period  from  1907-1912,  73.9  per  cent,  was  in  incorpor- 
ated stations,  while  but  24.3  per  cent,  and  7.7  per  cent, 
respectively  were  in  stations  owned  and  operated  by  in- 
dividuals and  firms.  More  specific  examples  of  the  ex- 
tent and  influence  of  holding  companies  are  the  Middle 
West  Utilities  Company  which  operates  in  315  cities  in 

1  "Evidences  that  the  holding  company  in  the  public  utility  field 
is  gaining  in  favor,  with  both  the  financier  and  the  investor,  is 
indicated  by  current  statistics.  The  best  figures  available  show 
that  of  approximately  $2,111,961,000  of  securities  issued  by  elec- 
tric light  and  power  companies,  there  is  about  82.5  per  cent, 
controlled  by  holding  companies.  Of  about  $1,320,000,000  of  se- 
curities issued  by  artificial  gas  companies,  there  is  about  66 
per  cent,  controlled  through  holding  companies.  Of  about  $4,043,- 
663,000  of  securities  issued  by  traction  companies  there  is  81.4 
per  cent,  controlled  by  holding  companies.  This  would  indicate 
that  out  of  a  total  of  $7,500,000,000  of  securities,  which  are 
now  outstanding  by  these  three  classes  of  utilities,  75.5  per 
cent  are  controlled  by  holding  corporations.  This  does  not 
include  the  securities  of  natural  gas  companies  and  water- 
supply  companies."  (The  Gas  Age,  Vol.  XXXIV,  No.  5,  p.  214, 
September  i,  1914.) 


LOWER  UTILITY  COSTS  315 

twelve  states  *  and  the  United  Gas  Improvement  Com- 
pany which  operates  in  sixteen  states.  William  P.  Bon- 
bright  &  Co.,  investment  bankers  of  New  York  City,  are 
interested  in  public  utilities  in  thirty-four  states.2 

Roughly  speaking,  the  history  of  utility  companies  may 
be  divided  into  three  eras:  (i)  That  of  the  small  in- 
vestor who  developed  a  local  street-car  system  or  other 
utility  for  a  limited  field  only,  with  the  expectation  of 
owning  and  operating  it  himself.  (2)  Then  came  the 
heyday  of  utility  pirates  who  through  means  fair  and 
foul  squeezed  out  the  small  investor,  through  control  of 
the  city  government  obtained  exclusive  franchises  lead- 
ing to  monopolistic  control,  and  then,  through  exclusive 
franchises  or  other  agreements  that  could  be  interpreted 
as  contracts,  the  obligations  of  which  the  state  could  not 
impair  within  the  meaning  of  the  federal  constitution, 
assured  to  themselves  a  field  pledged  neither  to  compe- 
tition nor  to  reasonable  regulation  and  control  by  the 
city's  authorities.  (3)  We  are  entering,  it  is  hoped,  into 
the  third  era  where,  through  administrative  regulation  and 
other  means,  utility  rates  and  service  are  based  on  the 
actual  cost  of  furnishing  those  services.  For  there  are 
many  among  the  large  holding  companies  and  invest- 
ment bankers  who  see  clearly  that  safety  of  their  securi- 
ties from  virtual  destruction  through  public  ownership 

1  Illinois,   Indiana,   Kentucky,   Oklahoma,   Missouri,   Michigan, 
New  York,  Vermont,  New  Hampshire,  Maine,  Wisconsin  and 
Nebraska.    Brief  submitted  on  behalf  of  "Public  Utility  Holding 
Companies"  to  the  Interstate  Commerce  Committee  of  the  United 
States  Senate,  in  the  matter  of  Senate  Bill  No.  4160,  p.  20. 

2  Alabama,  Arizona,  Arkansas,   California,  Colorado,  Connec- 
ticut, Georgia,  Idaho,  Illinois,  Indiana,  Iowa,  Kansas,  Kentucky, 
Louisiana,  Maine,  Michigan,  Minnesota,  Missouri,  Montana,  New 
Hampshire,  New  York,   North  Dakota,  Ohio,  Oklahoma,  Ore- 
gon, Pennsylvania,  Tennessee,  Texas,  Utah,  Vermont,  Virginia, 
Washington,  West  Virginia,  and  Wisconsin.    Ibid.,  p.  21. 


316  LOWER  LIVING  COSTS  IN  CITIES 

depends  upon  basing  prices  and  service  standards  on  ac- 
tual costs  and  not  on  capitalizations  representing  little 
more  than  the  selling  power  of  utility  promoters. 

Those  interested  in  holding  companies  present  an  op- 
posing array  of  advantages  accruing  to  cities  and  con- 
sumers as  a  result  of  their  operations.  Among  these  ad- 
vantages are:  (i)  that  a  high-grade  supervising  staff 
can  insure  "efficiency  in  construction,  administration, 
maintenance  and  operation"  of  the  local  utilities  of  a 
standard  impossible  save  through  the  holding  compa- 
nies; (2)  centralization  in  purchase  and  standardization 
of  materials  and  supplies  result  in  definite  economies  to 
be  shared  ultimately  by  the  consumer;  (3)  standardiz- 
ing of  operating  and  accounting  methods  makes  possible 
comparisons  in  efficiency  and  in  rates  and  prices  so  that 
the  results  obtained  by  local  operators  may  be  measured 
and  the  communities  may  likewise  measure  the  justice  of 
their  own  rates  and  service  standards;  (4)  outgrown 
equipment  can  be  transferred  to  smaller  communities 
and  thus  save  heavy  outlays  for  installation  and  depreci- 
ation; (5)  securities  of  large  holding  companies  are 
more  salable  and  funds  needed  for  local  development  can 
be  more  advantageously  secured;  (6)  as  the  combined 
credit  of  a  number  of  plants  can  be  pledged  and  risks 
prorated  and  averaged,  investments  are  more  stable. 

Those  who  see  in  holding  companies  dangers  to  the 
public  welfare  greater  than  their  advantages  point  out 
that,  while  there  may  be  a  capable,  general  supervising 
staff,  this  central  staff  has  been  too  often  handicapped 
by  substituting  low-grade  employees  in  the  local  con- 
cerns, and  that  the  economies  professed  in  the  purchas- 
ing of  supplies  and  materials,  through  the  standardiza- 
tion of  operating  and  accounting  methods,  through 
transfer  of  equipments  or  through  stability  in  invest- 
ments, are  translated  into  "watered  stock"  and  do  not 


LOWER  UTILITY  COSTS  317 

go  to  the  consumer.  To  this  watered  stock,  it  has  been 
further  pointed  out,  are  added  "future  values"  due  to 
the  growth  of  cities  and  the  unearned  increment  result- 
ing therefrom;  and  even  the  reputed  advantages  of  the 
large  concern  are  exploited  as  a  basis  for  still  further 
inflation  of  capitalization,  all  of  which  must  ultimately 
be  borne  by  the  consumer.  The  pressure  on  the  local 
manager  to  pay  good  dividends  and  ample  returns  on 
bonds  and  stocks  forces  him  to  pay  first  consideration  to 
maximum  returns  and  to  regard  service  and  rates  as  in- 
cidental and  secondary  to  this.  Moreover,  the  opponents 
to  holding  companies  further  allege  that  prices  to  patrons 
served  by  holding  companies  are  not  lower,  but  in  many 
cases  higher,  and  service  is  no  better,  and  in  many  places 
not  so  good,  as  that  enjoyed  by  patrons  of  plants  not 
owned  by  holding  companies.  Moreover,  evidence  is  ar- 
rayed to  show  that  "the  value  of  the  service"  is  used 
as  the  basis  for  prices  instead  of  "the  cost  of  service."  1 
A  real  danger  flowing  from  holding  companies  is  that 
such  companies,  owning  and  operating  types  of  plants 
that  might  otherwise  compete  with  each  other,  naturally 
tend,  as  it  is  to  their  own  advantage  to  do,  to  prevent 
any  actual  competition  among  their  own  concerns.  Thus 
a  holding  company  that  owns  and  operates  a  gas  plant 
in  one  city  will  naturally  look  with  disfavor  upon  the 
lowering  of  rates  by  another  of  its  own  plants  in  another 
city.  Indeed,  in  English  cities,  where  gas  and  electric 
plants  are,  as  a  rule,  municipally  owned  and  operated, 
it  is  held  to  be  far  more  advantageous  to  have  their 
control  vested  in  two  different  committees  of  the  Council 

*A  committee  of  the  National  Electric  Light  Association  at 
the  annual  convention  of  that  association  held  in  Philadelphia  in 
1914  reported  that  rates  should  be  based  on  the  value  of  the  serv- 
ice to  the  consumer,  which,  as  was  pointed  out  at  the  time  of 
the  convention,  is  but  another  way  of  saying  that  the  basis  of 
rates  should  be  "what  the  traffic  will  bear." 


318  LOWER  LIVING  COSTS  IN  CITIES 

because  centralization  under  one  committee  would  elimi- 
nate the  very  evident  advantages  accruing  through  com- 
petition between  the  two  in  rates  and  in  service.  Here 
is,  without  doubt,  a  very  grave  danger  to  the  welfare 
of  cities  and  urban  residents. 

And,  finally,  it  is  urged  that  holding  companies  add 
to  the  difficulties  of  local  control  and,  through  making  it 
difficult  to  secure  reasonable  rates  and  fair  service,  tend 
to  perpetuate  inflated  capitalizations.  It  is  admitted 
that,  under  absentee  ownership,  local  pressure  by  self- 
seeking  stock  and  bond  holders,  who  usually  come  from 
the  class  who  occupy  prominent  positions  in  the  com- 
mercial organizations  and  who  have  more  or  less  control 
over  newspapers  and  other  means  of  publicity,  and  who 
have  a  "sphere  of  influence"  in  governmental  circles,  has, 
to  a  large  extent,  been  eliminated.  But,  in  lieu  of  this, 
it  is  more  difficult  to  get  experts,  such  as  engineers  and 
lawyers,  to  work  for  and  testify  in  behalf  of  the  public 
side,  and  the  funds  and  experts  available  to  the  corpora- 
tions can  be  used  effectively  to  overcome  any  opposition 
that  can  be  set  up  within  the  funds  available  to  local  users 
or  local  public  officials.  To  overcome  this  difficulty,  the 
cities  have  begun  to  unite  in  the  organization  of  a  Utili- 
ties Bureau  through  which  cities  can  cooperate  and  ex- 
change information  as  effectively  as  do  the  utility  cor- 
porations through  holding  companies  and  other  large 
national  organizations. 

The  conclusion  to  be  reached  is  that  the  cities  must 
obtain  and  maintain  virile  control  over  their  own  public 
utilities  to  the  end  that  rates  and  service  may  be  based 
on  the  actual  values  of  local  plants  and  that  any  values 
accruing  simply  through  large  monopolistic  ownership 
may  be  wholly  eliminated. 

The  interdependence  of  one  city  or  county  upon  other 
cities  and  counties  is  apparent  to  all  and  is  rapidly  be- 


LOWER  UTILITY  COSTS  319 

coming  a  factor  of  increasing  importance.  A  case  in 
point  is  the  rapid  development  of  interurban  railway 
lines.  Since  1902  there  has  been  an  extensive  develop- 
ment of  suburban  and  interurban  railways.  By  1907 
the  track  mileage  outside  of  city  limits  constituted  nearly 
two-fifths  of  the  total  track  mileage  in  the  country.1 
Again,  the  economy  that  comes  through  large  reservoirs 
and  water  systems  out  of  which  many  cities  can  be 
supplied,  the  dependence  of  the  health  of  the  citizens 
of  one  community  upon  the  purity  of  the  water  sup- 
ply of  near-by  communities,  the  economies  resulting  in 
large  scale  generation  of  electric  current,  all  further  the 
dependence  of  one  community  upon  another.  No  city 
can  live  unto  itself  and  utility  rates  and  service  are  of 
interest  to  consumers  throughout  the  entire  state. 

The  inadequate  power  of  American  cities  in  the  con- 
trol and  operation  of  their  own  utilities  has  so  long  been 
a  matter  of  comment  by  those  familiar  with  the  situa- 
tion that  only  passing  reference  need  be  made  to  it  here. 
The  regrettable  fact  is  that  conscious  efforts  are  still 
being  made  to  keep  the  cities  impotent  in  handling  their 
utility  problems  through  denying  them  powers  justly 
theirs.  Thus  the  Pennsylvania  public  service  company 
law,  passed  in  1913,  contains  provisions  that  all  contracts 
between  public  service  companies  and  cities  must  be  ap- 
proved by  the  Commission:  "No  contract  or  agreement 
between  any  public  service  company  and  any  municipal 
corporation  shall  be  valid  unless  approved  by  the  com- 
mission: Provided,  That,  upon  notice  to  the  local  au- 
thorities concerned,  any  public  service  company  may  ap- 
ply to  the  commission,  before  the  consent  of  the  local 
authorities  has  been  obtained,  for  a  declaration  by  the 

General  Electric  Light  and  Power  Stations  and  Street  and 
Electric  Railways,  1912.  Department  of  Commerce,  Bureau  of 
the  Census,  Bulletin  124. 


320  LOWER  LIVING  COSTS  IN  CITIES 

commission  of  the  terms  and  conditions  upon  which  it 
will  grant  its  approval  of  such  contract  or  agreement,  if 
at  all."  *  The  result  is  that  the  city  is  placed  in  the  un- 
enviable position  of  having  to  appear  before  the  Com- 
mission to  ask  it  to  lower  rates  or  improve  service  as 
provided  by  a  contract  to  which  it  has  already  been  vol- 
untarily a  party.  The  provisions  of  other  public  service 
laws  likewise  tend  to  act  as  an  effective  estoppel  upon 
anything  like  a  virile  and  reasonable  action  on  the  part 
of  the  city. 


ELEMENTS  IN  A  CONSTRUCTIVE  UTILITY  PROGRAM 

If  rates  are  to  be  based  on  actual  costs,  and  not  on 
inflated  capitalization,  and  if  services  are  to  be  such  as 
are  reasonable,  adequate  and  necessary  for  the  further- 
ing of  the  best  interests  of  the  urban  dweller,  the  fol- 
lowing principles  must  be  fundamentally  followed  in  the 
policy  that  the  city  adopts  in  its  relation  to  its  serving 
companies. 

i.  Utility  rates  and  service  must  be  based  on  the 
actual  cost  necessary  for  providing  and  furnishing  those 
services. 

This  is  axiomatic.  It  is  a  generalization  to  which  all 
assent — in  form.  The  difficulty  comes,  however,  in  de- 
termining the  basis  for  judging  what  the  actual  costs  are. 
"A  reasonable  return  on  a  fair  valuation,"  say  the 
courts.  But  what  is  a  reasonable  return?  And  what  a 
fair  valuation?  The  courts  have  upheld  a  return  of 
from  5  to  8  per  cent,  as  adequate,  the  percentage  varying 
with  the  plant  conditions,  elements  of  risk  and  the  neces- 

lThe  Public  Service  Company  Law  establishing  THE  PUBLIC 
SERVICE  COMMISSION  of  the  Commonwealth  of  Pennsylvania, 
January  i,  1914. 


LOWER  UTILITY  COSTS     •  321 

sity  for  further  investments  to  secure  adequacy  and 
safety  of  service. 

But  what  shall  be  included  in  a  reasonable  return? 
Shall  all  past  losses  be  allowed  for?  Shall  the  company 
be  allowed  to  recoup  from  future  returns  all  money 
spent  in  developing  the  business  with  or  without  regard 
to  how  those  moneys  were  spent?  "Experts"  are  ap- 
pearing before  the  public  service  commissions  offering 
"scientific  theories"  of  return  which,  if  accepted,  would 
authorize  the  utility  concerns  in  effect  to  "charge  all  the 
traffic  will  bear." 

The  issue  at  stake  is  well  expressed  in  the  two 
phrases  "competitive  theory"  and  "agency  theory." 
The  former  holds  that,  in  the  past,  utilities  were,  in  fact, 
whatever  the  theory,  on  the  same  basis  as  private  com- 
panies, and  that  the  return  allowed,  therefore,  to  be  rea- 
sonable, must  include  all  of  their  past  losses  and  devel- 
opmental costs.  The  agency  theory  is  in  substance  to 
the  effect  that  utilities  are  now,  in  fact,  whatever  they 
once  were,  agents  of  the  state  or  of  the  city,  and  that 
the  return  and  rate  of  return,  to  be  reasonable  must, 
therefore,  include  only  enough  to  pay  a  fair  return  on 
a  fair  valuation  of  the  property  now  being  used  and  now 
useful  for  the  public  purpose.  This  latter  basis  is  the 
one  upon  which  rates  for  municipal  utilities  must  ulti- 
mately be  based. 

But  what  elements  shall  be  determining  in  arriving 
at  a  "fair  valuation"?  These  have  been  set  forth  in  the 
leading  case  of  the  United  States  Supreme  Court, 
Smythe  versus  Ames,  169  U.  S.  466,  decided  in  1898, 
which  reads  as  follows: 

"We  hold,  however,  that  the  basis  of  all  calculations 
as  to  the  reasonableness  of  rates  to  be  charged  by  a  cor- 
poration maintaining  a  highway  under  legislative  sanc- 
tion must  be  the  fair  value  of  the  property  being  used 


322  LOWER  LIVING  COSTS  IN  CITIES 

by  it  for  the  convenience  of  the  public.  And  in  order  to 
ascertain  that  value,  the  original  cost  of  construction, 
the  amount  expended  in  permanent  improvements,  the 
amount  and  market  value  of  its  bonds  and  stock,  the 
present  as  compared  with  the  original  cost  of  construc- 
tion, the  probable  earning  capacity  of  the  property  un- 
der particular  rates  prescribed  by  statute,  and  the  sum 
required  to  meet  operating  expenses,  are  all  matters  for 
consideration,  and  are  to  be  given  such  weight  as  may 
be  just  and  right  in  each  case.  We  do  not  say  that  there 
may  not  be  other  matters  to  be  regarded  in  estimating 
the  value  of  the  property." 

The  present  market  value  of  the  stocks  and  bonds 
cannot  of  themselves  be  used  as  the  sole  basis  for  de- 
termining a  fair  valuation,  as  that  market  value  is  based 
as  well  upon  the  estimated  future  earnings  as  upon  cur- 
rent earnings ;  and  it  certainly  is  based  on  existing  rates 
and  service  standards.  To  admit  market  value  as  a  de- 
terming  factor  in  fixing  rates  would  of  itself,  therefore, 
preclude  any  lowering  of  rates.  Assessed  valuation  for 
taxation  purposes  is  not  alone  a  satisfactory  guide, 
since  the  assessment  for  taxation  varies  with  the  rates 
and  with  the  inclinations  of  tax  assessors.  Neither  can 
the  original  cost  of  the  property  alone  be  taken  as  a  final 
measure  for  fair  value,  because  the  properties  may  have 
cost  too  much,  or  because  the  plant  as  purchased  is  too 
large,  or  because  a  portion  of  the  plant  is  not  now  util- 
ized, or  because  the  equipment  has  been  superseded.  The 
bare  cost  of  substantial  reproduction  at  the  present 
moment  is  of  value  in  determining  a  fair  valuation;  but 
alone  it  cannot  be  the  guiding  factor  because  it  bears  no 
necessary  relation  to  actual  values.  "Other  factors,  such 
as  depreciation  through  wear  and  tear  in  service,  the 
failure  of  the  management  to  keep  its  property  abreast 
of  the  march  of  invention  and  progress,  the  extent  to 


LOWER  UTILITY  COSTS  323 

which  the  facilities  of  the  plant  are  capable  of  supply- 
ing the  needs  of  a  growing  and  shifting  population,"  are 
also  elements  of  present  value. 

"The  company  is  entitled,"  says  the  Wisconsin  Com- 
mission, "to  a  fair  return,  not  always  upon  the  cost  of 
the  property,  because  it  may  have  cost  too  much;  not 
always  upon  the  outstanding  indebtedness,  because  it 
may  be  in  excess  of  the  real  value  of  the  property;  not 
always  upon  the  total  amount  invested,  because  some 
portion  of  that  which  is  acquired  by  the  investment  may 
be  neither  necessary  nor  presently  useful  for  the  public 
service;  but  upon  the  fair  present  value  of  that  which 
is  used  for  the  public  benefit,  having  due  regard  always 
to  the  reasonable  value  of  the  service  rendered."  x 

2.  The  city  may  well  assume  all  risks  as  to  future  in- 
vestments in  its  utilities. 

An  ever-present  factor  in  the  misgovernment  of 
American  cities  has  been  speculation  in  their  public  utili- 
ties. Of  the  many  objections  to  such  speculation,  these 
stand  out  ominously :  (a)  The  element  of  speculation 
often  attracts  a  type  of  owners  whose  venality  is  but 
mildly  expressed  by  the  epithets  so  often  applied  to  them 
of  "grafters"  and  "utility  pirates."  (b)  So  long  as  there 
is  an  element  of  risk,  the  utility  owner  can  by  right  ex- 
pect and  demand  a  return  that  will  amply  compensate 
him  for  such  risks.  Since  the  consumer  has  to  pay, 
therefore,  not  only  for  actual  losses,  but  for  imaginary 
risks,  his  costs  can  be  lowered,  and  a  higher  type  of 
utility  owner  secured,  by  the  city's  frankly  assuming 
such  risks.  The  ways  in  which  this  can  be  done  are 
numerous.  New  York,  Philadelphia  and  Boston  have 
recently  assumed  the  risks  incident  to  the  building  and 
operation  of  their  subways.  In  assuming  such  risks, 

lSee  Clyde  Lyndon  King:  "Regulation  of  Municipal  Utili- 
ties," p.  304. 


324  LOWER  LIVING  COSTS  IN  CITIES 

however,  the  city  must  take  care  not  to  guarantee  exist- 
ing capitalizations,  if  they  are  "inflated,"  nor  assume  the 
costs  of  past  follies. 

3.  Utility  rates  must  be  adjusted  in  accordance  with 
the  quality  of  the  service  rendered. 

Quality  of  service  as  here  used  includes  extensions, 
additions,  modern  equipment,  safety  appliances,  charac- 
ter of  pressure,-  the  laying  of  pipes,  the  putting  of  wires 
underground  and  any  and  all  other  phases  of  service 
to  the  end  that  standards  shall  be  adequate  and  safe. 
The  rate  of  return  and  the  amount  of  capitalization 
allowed  must  be  sufficiently  large  so  that  a  fair  return 
may  be  earned  upon  all  necessary  investments.  The  wis- 
dom of  the  California  ruling  on  this  point  cannot  be 
gainsaid.1 

1  The  California  Commission  after  its  investigation  of  a  wreck 
upon  the  electric  line  of  the  San  Francisco,  Napa  Valley  and 
Calistoga  Railway,  said: 

"Most  of  these  interurban  lines  should  be  protected  by  block 
signals,  and  our  engineer  has  been  directed  to  have  a  thorough 
investigation  made  of  all  these  roads  with  a  view  to  requiring 
the  installation  of  block  signals  at  once  in  the  more  urgent  cases 
and  gradually  in  all  cases.  If  the  installation  of  the  necessary 
safety  devices  requires  an  increase  of  the  rates  of  these  utilities, 
such  increase  will  be  allowed.  The  traveling  public  has  a  right 
to  be  protected,  and  should  be  willing  to  pay  for  such  protection. 
Up  to  the  present  time,  however,  in  this  state,  it  cannot  be 
said  by  any  public  utility  that  its  failure  to  install  proper  safety 
devices  is  due  to  inadequate  rates.  No  suggestion  has  come 
from  any  one  of  them  that  this  Commission  permit  an  increase 
in  rates  for  this  purpose.  The  Commission  stands  ready  at  all 
times,  however,  to  permit  rates  high  enough  to  pay  a  reasonable 
return  upon  the  fair  value  of  the  property  devoted  to  the  public 
service,  good  wages  to  experienced  men,  and  installation  of  such 
appliances  as  may  be  necessary  to  promote  the  safety  of  the 
traveling  public  and  employees  of  the  utilities  under  its  juris- 
diction." The  Annals  of  the  American  Academy  of  Political 
and  Social  Science,  May,  1914,  p.  298. 


LOWER  UTILITY  COSTS  325 

If  this  principle  should  be  accepted,  it  follows  as  a 
corollary  that  a  company  using  inadequate  or  obsolete 
equipment,  as,  for  instance,  a  type  of  street  lamp  that 
renders  poor  service  and  consumes  a  larger  amount  of 
current  than  a  modern  type  would,  should  receive  lower 
rates,  not  higher  rates  on  the  ground  that  the  operating 
expenses  for  obsolete  equipment  are  larger.  So,  a 
utility  with  a  limited  product  must  be  restricted  in  its 
operation  to  the  area  to  which  it  can  render  efficient 
service,1  such,  for  instance,  as  the  area  to  which  an  irri- 
gation company  with  a  limited  supply  of  water  can  offer 
its  service,  or  the  area  supplied  by  a  natural  gas  company 
or  an  artificial  gas  company  without  adequate  control 
over  its  pressure  or  quality  of  gas,  and  other  service 
connections.2 

4.  Standards  must  be  set  as  to  renewals  and  depre- 
ciations in  utility  properties,  and  the  cities  themselves 
must  possess  full  powers  to  inspect  such  properties  and 
to  take  any  and  all  steps  needed  to  see  that  the  required 
standards  are  maintained. 

It  is  axiomatic  in  private  businesses  efficiently  con- 
ducted that  definite  standards  of  equipment  and  effi- 
ciency must  be  set  and  renewal  and  depreciation  funds 
put  aside  annually  out  of  earnings  to  maintain  those 

1  Joint  use  of  facilities  must  be  required ;  such  as  the  use  of 
a  city  trolley  terminal  by  an  interurban  line,  or  better  still 
the  running  of  through  freight  and  passenger  cars  over  both 
lines. 

a  Such  as  between  steam  railways  and  electric  trolleys.  The 
building  of  huge  steam  terminals  in  the  heart  of  American 
cities  at  heavy  expenditures  for  land  and  buildings  could  largely 
be  saved  by  requiring,  as  German  cities  do,  and  Chicago  is 
trying  to  do,  that  electric  and  steam  lines  should  offer  joint 
services.  This  would  ultimately  mean  a  better  distribution  of 
patrons  with  markedly  less  congestion  in  foot  and  vehicle  traf- 
fic at  or  near  the  central  sections  of  the  city. 


326  LOWER  LIVING  COSTS  IN  CITIES 

standards.  This  plain  business  rule  utility  corporations 
have  consciously  ignored  throughout  the  past.  The  his- 
tory of  every  American  city  is  replete  with  such  in- 
stances. There  is  a  special  temptation  for  this  to  be 
done,  particularly  as  the  end  of  the  franchise  term  ap- 
proaches, for  either  one  of  three  reasons:  (i)  To  with- 
draw through  dividends  the  money  invested  if  the  com- 
pany may  have  to  cease  doing  business  or  (2)  to  force 
such  franchise  terms  as  the  company  pleases  through 
promises  to  improve  service  standards  as  soon  as  those 
terms  have  been  finally  approved  by  the  authorities.  If 
(3)  there  are  provisions  in  the  franchise  that  look  toward 
municipal  ownership  and  operation,  the  temptation  to 
let  the  plant  run  down  is  exceedingly  strong.  As  any 
one  or  all  three  of  these  contingencies  may  arise  at 
any  time  in  any  city,  the  only  safe  rule  is  that  definite 
standards  be  set  by  contract  agreement  or  administrative 
ruling  and  that  the  city  be  given  adequate  powers  to  see 
that  these  required  standards  are  maintained. 

It  may  be  a  matter  of  indifference  as  to  whether  the 
standards  are  set  by  state  or  by  city  authorities.  It  is 
not  a  matter  of  indifference,  however,  as  to  whether  or 
not  the  city  has  powers  to  inspect  the  books  and  prop- 
erties of  the  company  in  order  to  ascertain  whether 
the  company  is  maintaining  its  standards  as  required. 
It  is  to  their  local  authorities  that  the  citizens  whose 
money  provides  and  maintains  the  utilities  must  look 
for  proper  enforcement  of  maintenance  standards. 
The  same  rule  applies  to  extensions  and  additions. 
Whether  there  be  state  regulative  commissions  or  city 
regulative  commissions,  or  both,  the  city  authorities 
must  retain  full  powers  of  inspection.  These  powers, 
however,  need  not  be  exclusive  of  the  state's  powers  in 
the  premises. 

5.     The  public  authorities  must  have  complete  control 


LOWER  UTILITY  COSTS  327 

over  -future  stock  issues  and  the  keeping  of  accounts  by 
the  utility  company, 

Much  has  been  written  as  to  the  advisability  and  in- 
advisability  of  public  control  over  stock  issues  and  capi- 
talization. It  has  been  urged  on  the  one  hand  that  the 
regulative  bodies,  city  or  state,  can  fix  rates  and  valua- 
tions regardless  of  the  amount  of  stocks  and  bonds  is- 
sued by  the  companies.  It  is  further  urged  that  ap- 
proval of  stock  and  bond  issues  is  a  moral,  if  not  a  legal, 
guarantee  that  the  company  will  be  allowed  in  the  fu- 
ture a  fair  return  thereon,  whether  or  not  investments 
have  been  made  with  ordinary  business  judgment  or 
administered  with  ordinary  business  efficiency.  On  the 
other  hand,  it  is  urged  that  an  overcapitalized  utility 
will  be  under  heavy  pressure  at  all  times  to  pay  returns 
on  that  inflated  capitalization  and  that  such  returns  can 
be  paid  only  through  exorbitant  rates  or  poor  service  or 
both.  As  a  rule,  regulative  commissions  will  be  unable 
to  prevent  this.  The  recent  scandal  in  the  New  York, 
New  Haven  and  Hartford  Railroad  is  the  typical  exam- 
ple now  used  to  clinch  this  argument. 

The  gist  of  the  matter  seems  to  be  that  secrecy  or 
manipulation  must  forever  cease  in  the  field  of  public 
utilities  and  that  the  only  sure  way  to  prevent  abuses  in 
the  future  is  to  have  new  stock  and  bond  issues  made 
valid  only  after  approval  by  the  public  authorities  with 
full  publicity.  It  would  seem  that  continuity  of  policy 
and  economic  administration  of  such  matters  may  best  be 
secured  through  centralization  in  the  state  authorities. 

The  standardization  of  accounts  and  the  methods  of 
keeping  accounts  is  so  evidently  coupled  with  public  wel- 
fare that  few  rise  to  question  its  advisability  now.  It  is 
necessary  in  order  to  make  sure  that  earnings  are  prop- 
erly credited  and  expenses  properly  charged.  It  proves, 
moreover,  to  be  stimulating  to  the  companies  and  ad- 


328  LOWER  LIVING  COSTS  IN  CITIES 

vantageous  to  the  communities  because  comparisons  can 
be  made  between  privately  and  publicly  owned  plants. 

6.  The  city  authorities  must  have  in  their  own  right 
access  to  the  books  and  the  properties  of  these  utilities 
and  any  and  all  other  powers  needed  for  a  complete  de- 
termination of  the  reasonableness  of  the  rates  and  the 
adequacy  of  the  services  of  their  utility  companies. 

This  power  is  essential  to  continuous  control  and  con- 
tinuous control  is  essential  to  adequate  and  safe  con- 
trol of  municipal  utilities.  Whether  the  commission  to 
hear  the  case  be  a  municipal  or  a  state  commission  is 
not  a  matter  of  vital  importance.  But  it  is  a  matter  of 
vital  importance  that  the  city's  efforts  to  secure  reason- 
ableness of  rates  and  adequacy  of  service  should  not  be 
hampered  and  rendered  impotent  through  inability  to  get 
at  books  and  properties.  Nothing  can  be  lost  in  actual 
values,  and  much  can  be  gained  in  public  confidence 
and  in  city  efficiency,  through  the  granting  of  this  power. 

7.  As  a  rule  the  monopolistic  character  of  municipal 
utilities  must  be  frankly  recognised. 

The  monopolistic  character  of  public  utilities  has  been 
well  put  by  the  Railroad  Commission  of  Wisconsin  as 
follows : 

"Duplication  of  such  plants  is  a  waste  of  capital,  when- 
ever the  service  can  be  adequately  furnished  by  one 
plant.  It  necessarily  means  that  interest  and  mainte- 
nance must  be  earned  on  a  much  greater,  if  not  twice  as 
great,  an  investment  and  that  the  actual  cost  of  opera- 
tion is  likely  to  be  relatively  higher.  Competition  in  this 
service,  therefore,  usually  means  a  bitter  struggle  and 
low  rates  until  one  of  the  contestants  is  forced  out  of 
the  field,  when  the  rates  are  raised  to  the  old  level,  if 
not  above  it,  or  to  a  combination  or  understanding  of 
some  sort  between  them  which  also  ultimately  results 
in  higher  rates.  In  this  way  it  often  happens  that  the 


LOWER  UTILITY  COSTS  329 

means  which  were  thought  to  be  preventative  of  onerous 
conditions  are  impotent.  In  fact,  active  and  continuous 
competition  between  the  public  utility  corporations  fur- 
nishing the  same  service  to  the  same  locality  seems  out 
of  the  question.  This  has  been  shown  by  experience. 
Such  competition  is  contrary  to  the  very  nature  of 
things.  Two  distinct  and  separate  corporations  are  not 
likely  to  remain  separate  very  long  after  it  becomes  clear 
that  the  services  rendered  by  both  can  be  more  cheaply 
and  more  effectively  furnished  by  only  one  of  them." 
2  Wis.  R.  R.  Rep.  5. 

It  does  not  follow,  however,  that  the  best  results  can 
be  secured  through  the  adoption  of  a  ruling  that  under 
no  circumstances  will  competition  be  permitted.  Cases 
will  inevitably  arise  in  actual  practice  where  the  con- 
sumer will  get  better  terms  and  service  in  the  long  run 
through  competition.  An  electric  company  highly  over- 
capitalized, with  obsolete  equipment  in  its  generating 
plant,  with  unreasonably  high  operating  costs  as  a  re- 
sult thereof,  and  manned  by  those  with  an  anti-public 
point  of  view,  will  frequently  be  brought  to  terms  more 
definitely  through  a  competing  company  than  through 
any  other  means.  That  is  to  say,  a  consumer  will  at 
times  find  it  profitable  to  pay  for  duplication  of  plants 
rather  than  to  continue  to  pay  on  capitalizations  wholly 
unwarranted  and  operating  costs  not  justified  by  ordi- 
nary business  judgment  and  efficiency. 

Public  service  commissions  have  usually  followed  the 
Wisconsin  ruling,  which  is  to  the  effect  that  the  public 
utility  company  whose  territory  is  threatened  shall  be 
given  ample  time  to  repent  and  make  the  necessary  read- 
justments. In  effect  this  means  that  all  that  an  offer  of 
lower  rates  by  another  public  utility  company  can  mean 
is  that  the  company  against  which  competition  is  threat- 
ened will  merely  readjust  its  rates  or  service  standards 


330  LOWER  LIVING  COSTS  IN  CITIES 

to  meet  the  will  of  the  commission.  Utility  companies, 
therefore,  will  have  no  tendency  to  compete  with  one 
another,  either  in  efficiency  or  for  territory.  The  adop- 
tion of  the  principle  that  utility  companies  shall  have 
a  monopoly  in  their  respective  territories  is  in  effect 
to  state  that  the  managers  of  the  utility  companies  are 
made  agents  of  the  state  to  secure  the  best  possible  rates 
and  standards  of  service  for  their  patrons.  To  couple 
this  principle  with  the  practice  of  never  allowing  com- 
petition is  as  absurd  as  to  hold  that  employees  under 
civil  service  should  never  be  dismissed  for  any  cause, 
however  just. 

The  California  ruling  is  that,  if  one  utility  occupies  a 
field  and  another  utility  seeks  to  enter,  the  first  utility 
will  be  protected  in  its  monopoly  only  in  case  its  service 
has  been  as  adequate  and  its  rates  as  reasonable  as  the 
new  utility  could  give.  That  is,  the  certificate  of  con- 
venience and  necessity  would  be  issued  on  the  basis  of 
the  rates  and  service  in  effect  on  the  date  of  the  filing 
of  the  competing  utility's  offer;  and  endless  time  for 
repentance  is  not  granted.  Each  utility  company,  there- 
fore, is  expected  to  put  itself  in  such  a  position  that  its 
patrons  are  at  all  times  adequately  served  at  reasonable 
rates.  The  rule  of  the  California  commission  will,  in 
the  long  run,  be  much  safer  than  the  practice  of  the 
Wisconsin  commission. 

Competition  in  municipal  ownership  and  operation  is 
a  potent  power  for  reasonable  rates  and  service  which 
no  municipality  should  suffer  to  be  taken  out  of  its 
hands.  The  weakening  of  municipal  power  for  securing 
justice  through  provisions  such  as  those  in  the  public 
service  company  law  of  Pennsylvania,  by  which  no 
municipality  can  build  or  operate  a  competing  plant 
nor  extend  the  lines  or  the  number  of  private  con- 
sumers of  existing  plants,  save  upon  the  permission  of 


LOWER  UTILITY  COSTS  331 

a  state  commission,  cannot  but  be  iniquitous  in  its  final 
results. 

8.  A  city  must  have  the  power  enumerated  to  it  by 
the  state  and  specifically  reserved  to  it  in  its  franchises 
and  contracts  to  take  over  for  public  ownership  and  op- 
eration any  and  all  of  its  utility  plants. 

The  alternative  of  municipal  ownership  is  needed  for 
two  reasons:  In  the  first  place,  the  final  test  as  to  the 
reasonableness  in  rates  and  service  must  be  what  a  pub- 
licly owned  and  operated  plant  can  provide  those  rates 
and  services  for.  As  the  president  of  the  California 
Commission  has  recently  pointed  out:  "We  should  al- 
ways have  in  mind  two  things:  first,  that  under  private 
ownership  we  must  be  so  generous,  and  no  more  so,  as 
is  necessary  to  get  our  public  utility  work  done  and 
money  invested  in  such  enterprises ;  and,  second,  we  must 
always  have  in  mind  the  comparison  between  the  con- 
ditions that  would  exist  if  public  ownership  were  re- 
sorted to  and  those  that  confront  us  under  private  own- 
ership, and  if  it  be  found  that  the  amounts  exacted  un- 
der private  ownership  in  payment  for  doing  the  busi- 
ness are  excessive  in  comparison  with  the  amounts  that 
could  be  reasonably  expected  to  be  exacted  under  public 
ownership,  then  the  latter  will  inevitably  result."  In 
the  second  place,  the  city's  best  interests  necessitate  a 
continuous  control  over  its  public  utilities.  While  con- 
tinuity of  control  can  be  maintained  in  part  by  some  of 
the  measures  above  set  forth,  such  as  access  to  books 
and  properties,  yet  there  will  come  a  time  in  the  history 
of  most  every  public  utility  when  continuity  and  ade- 
quacy of  control  can  come  only  because  the  city  has  the 
alternative  of  municipal  ownership  and  operation. 

It  must  be  clearly  held  in  mind  that  the  goal  to  be  at- 
tained is  rates  based  on  cost  and  services  adequate  and 
safe.  The  American  people  are  committed  to  attaining 


332  LOWER  LIVING  COSTS  IN  CITIES 

these  ends  through  the  most  effective  means.  If  muni- 
cipal ownership  and  operation  prove  to  be  that  means\ 
there  will  be  no  hesitancy  in  adopting  such  means  simply 
because  of  "bogies"  about  socialism. 

No  proof  of  this  is  so  definite  as  the  rapid  trend 
toward  public  ownership  and  operation.  For  instance, 
there  has  been  a  distinctive  increase  in  the  municipal 
ownership  of  electric  plants  from  1902  to  1912.  The 
number  of  stations  publicly  owned  and  operated  in- 
creased from  815  in  1902  to  1,562  in  1912,  an  increase 
of  91.7  per  cent.  The  total  income  to  such  plants  amount- 
ed in  1912  to  $23,218,989  as  compared  with  $6,965,105 
in  1902,  an  increase  of  233.4  per  cent.  The  total  ex- 
penses for  1912,  including  salaries  and  wages,  amounted 
to  $16,917,165  as  compared  with  $5,245,987  in  1902, 
an  increase  of  222.5  Per  cent.  The  total  number  of  per- 
sons employed  was,  in  1912,  7,940  as  contrasted  with 
3,417  in  1902,  an  increase  of  132.4  per  cent.  The  output 
of  stations  in  kilowatt  hours  was  537,526,730  in  1912 
as  compared  with  195,904,439  in  1902,  an  increase  of 
174.4  per  cent.  The  number  of  new  municipal  stations 
from  1907-12  was  301,  the  number  of  stations  that 
changed  from  commercial  to  municipal,  106,  the  number 
that  changed  from  municipal  to  commercial,  80,  making 
an  increase  of  26  for  municipal  ownership.  In  the  period 
from  1902-1912,  while  the  total  number  of  commercial 
and  municipal  central  electric  stations  increased  0.9  per 
cent.,  the  number  of  municipal  stations  increased  51.5 
per  cent.,  while  the  number  of  commercial  stations  actu- 
ally decreased  7.7  per  cent. 

Municipally  owned  and  operated  plants  will  serve  as 
laboratories  by  which  cities  can  determine  what  the  ac- 
tual cost  factors  in  furnishing  the  various  public  services 
are  and  ought  to  be.  Municipal  ownership  and  opera- 
tion will  be,  after  all  is  said,  the  determining  factor  in 


LOWER  UTILITY  COSTS  333 

fixing  those  rates  and  services.  When  stock  can  no 
longer  be  watered  freely,  when  exorbitant  profits  can 
no  longer  be  anticipated,  subsidized  magazines  will  no 
longer  depict  in  such  glowing  terms  the  dire  results  that 
will  accrue  through  municipal  ownership  and  operation. 
Indeed,  if,  through  the  decisions  of  public  service  com- 
missions and  the  courts,  ample  values  can  be  written  into 
existing  plants  we  may  expect  within  a  very  short  time 
a  landslide  toward  municipal  ownership,  and  operation 
encouraged  and  financed  by  the  big  serving  companies 
themselves. 

The  effect  of  the  option  of  city  ownership  on  city  effi- 
ciency is,  wherever  adopted,  most  marked.  At  the  worst, 
a  city  simply  turns  from  known  losses  of  mismanage- 
ment to  prophesied  losses  of  public  management;  and 
many  of  the  latter  ills  fail  of  fruition.1 

1  The  Municipal  Lighting  Committee  of  the  City  Club  of 
Berkeley  has  published  a  bulletin  on  Municipal  Lighting  Plants 
in  California  which  seems  supported  by  facts  gleaned  from  first- 
hand investigations.  This  report  includes  the  following  para- 
graphs : 

"The  condition  of  the  physical  plants  is  generally  good,  and 
may  be  roughly  classified  as  seven  good;  four  fair;  four  poor. 
A  small  increased  expenditure  each  year  would  keep  all  these 
in  good  condition,  and  the  profits  are  sufficient  to  permit  this 
without  raising  rates.  The  chief  difficulty  is  in  the  small  towns, 
which  cannot  afford  to  employ  competent  foremen  and  linemen. 

"The  solution  of  this  has  been  worked  out  successfully  by  the 
towns  of  Glendale  and  Burbank.  The  Superintendent  of  the 
Glendale  Electric  Department  has  built  a  complete  distributing 
system  in  Burbank,  and  is  now  maintaining  it  under  an  agree- 
ment by  which  Burbank  pays  a  part  of  his  salary  and  the  actual 
cost  of  labor  and  materials  is  furnished  by  the  City  of  Glen- 
dale. This  plan  can  be  adopted  by  any  two  or  more  adjacent 
towns  with  good  results  and  economy. 

"Contrary  to  the  opinion  generally  held  respecting  the  man- 
agement of  municipal  undertakings,  the  investigation  developed 
the  fact  that  the  number  of  men  employed  in  the  lighting  plants 


334  LOWER  LIVING  COSTS  IN  CITIES 

We  are  now  thoroughly  committed  to  the  regulation 
of  municipal  utilities.1  Regulation  has  been  accepted  by 
the  companies.  The  question  of  the  future  is  as  to 
whether  or  not  regulation  will  in  turn  give  way  to  public 
ownership  and  operation.  It  is  now  apparent  that  the 
permanency  of  regulation  is  endangered  in  two  ways.  In 
the  first  place,  public  service  commissions  tend  to  allow 
higher  valuations  than  would  be  allowed  by  the  courts. 
The  reason  is  that  public  service  commissions  must  at- 
tract as  well  as  retain  capital  in  their  cities  and  states, 
while  the  duty  of  the  courts  is  solely  to  prevent  confisca- 
tion. If  values  are  fixed  at  points  beyond  what  the  city 
could  build  its  own  plant  for,  the  cities  will  tend  toward 
public  ownership  and  operation.  In  the  second  place, 
the  laws  creating  public  service  commissions  have,  many 

is  too  few  rather  than  too  many.  This  has  been  caused  in  some 
cases  by  the  desire  to  make  the  department  show  a  larger  profit 
than  is  proper,  and  also  to  prevent  criticism  of  the  management 
by  political  opponents." 

1The  following  states  have  commissions  with  full  jurisdiction 
over  public  utilities : 

Slate  Title  of  Commission 

Arizona Corporation  Commission 

California Railroad  Commission  of  the  State  of 

Connecticut Public  Utilities  Commission 

District  of  Columbia. . . .  Public  Utilities  Commission  of  the 

Georgia Railroad  Commission  of 

Idaho Public  Utilities  Commission 

Illinois Public  Utilities  Commission  of 

Indiana Public.Service  Commission  of 

Maryland Public" Service  Commission 

Massachusetts Board  of  Gas  and  Electric  Light  Commission 

Michigan Railroad  Commission 

Missouri Public  Service  Commission 

Montana Railroad  Commission  of 

Nevada Public  Service  Commission  (Electric  Railways  excluded) 

New  Hampshire Public  Service  Commission 

New  Jersey Board  of  Public  Utility  Commission  for  the  State  of 

New  York Public  Service  Commissions,  ist  and  2nd  Districts 

Ohio Public  Utilities  Commission  of 

Oklahoma Corporation  Commission  of 

Oregon Railroad  Commission  of 

Pennsylvania Public  Service  Commission  of  the  Commonwealth  of 

Rhode  Island Public  Utilities  Commission 

Vermont Public  Service  Commission 

Washington The  Public  Service  Commission  of 

West  Virginia Public  Service  Commission 

Wisconsin Railroad  Commission  of 


LOWER  UTILITY  COSTS  335 

of  them,  taken  from  the  cities  practically  all  control  over 
their  own  utilities.  It  cannot  be  expected  that  the  cities, 
especially  the  larger  ones,  will  suffer  all  control  over 
matters  so  vital  to  their  welfare  as  their  utilities  to  be 
taken  out  of  their  hands.  The  result  of  extreme  cen- 
tralization of  regulative  powers  may  be  reaction  against 
any  regulation  and  toward  public  ownership. 

The  test  of  the  durability  of  regulation  must  ulti- 
mately be  its  success  in  assuring  adequate  standards  at 
rates  based  on  actual  costs.  In  any  case  the  price  of 
minimum  utility  costs  and  adequate  service  standards  is 
eternal  vigilance  by  the  public  spirited. 


CHAPTER   XIX 
TAXATION   AND  GOVERNMENTAL   EFFICIENCY 

To  many  urban  citizens  the  tax  rate  is  the  barometer 
for  gauging  living  costs.  To  these,  as  the  economic 
pressure  rises,  the  tax  rate  must  be  lowered;  as  eco- 
nomic pressure  is  relieved,  the  tax  rate  becomes  a  matter 
of  more  or  less  indifference.  The  soundness  of  this  tra- 
ditional attitude  is  best  tested  by  an  analysis  of  urban 
expenditures. 

For  each  $100  in  taxes  paid  by  the  residents  of  cities 
of  over  30,000  population,1  $i  1.70  goes  to  the  general  gov- 
ernment; $11. 80  to  the  police  department;  $9.30  to  the 
fire  department;  to  all  other  protection  to  person  and 
property,  $1.90;  conservation  of  health,  $2.00;  sanita- 
tion, $8.20;  highways,  $11.40;  charities,  hospitals  and 
corrections,  $6.50;  schools,  $28.90;  libraries,  $1.30;  rec- 
reation, $3.70;  miscellaneous,  $.40;  general,  $2.90.  The 
total  receipts  to  cities  of  the  above-named  class,  dur- 
ing the  fiscal  year  1912,  were  $i,85i,547,93o.2  In  that 

1  Financial  Stastistics  of  Cities  Having  a  Population  of  Over 
30,000,  1912,  p.  40. 

1  These  receipts,  classified  by  source,  were  as  follows :  general 
property  tax,  $512,954,015;  special  property  taxes,  $11,894,494; 
poll  taxes,  $1,663,289;  business  taxes,  $52,106,810;  non-business 
license  taxes,  $3,991,825;  special  assessments,  $71,687,654;  fines, 
forfeits  and  escheats,  $4,231,165;  subventions  and  grants,  $34,- 
315,501 ;  donations,  gifts  and  pension  assessments,  $4,472,135 ; 
earnings  of  general  departments,  $21,000,655;  highway  privi- 
leges, $12,337,261 ;  rents  of  investment  properties,  $5,737,285 ;  in- 
terest, $24,257,087;  earnings  of  public  service  enterprises,  $88,- 

336 


TAXATION  337 

year  the  assessed  valuation  of  the  property  in  those  cities 
was  $30,677,214,126. 

In  thirty-three  Massachusetts  cities,  ranging  in  popu- 
lation from  14,073  to  606,216,  the  following  expendi- 
tures were  made  for  each  $100  of  taxpayers'  money: 
general  administration,  $7.60;  police  department,  $10.11 ; 
fire  department,  $8.8 1 ;  other  protection  of  life  and  prop- 
erty, $1.80;  public  health  and  sanitation,  $9.01;  high- 
ways and  bridges,  $20.62;  charities  and  corrections, 
$6.10;  education,  $28.06;  libraries  and  reading-rooms, 
$2.03;  recreation,  $4.62;  soldiers'  benefit  (estimated), 

$-94.1 

If  health  conservation  increases  productivity,  and 
therefore  multiplies  urban  power;  if  the  facts  in  the 
chapter  on  Vitality  through  Recreation  do  prove  the 
need  for  recreational  facilities  and  reveal  ample  returns 
on  money  invested  therein ;  if  the  sanitary  and  social 
welfare  of  urban  residents  requires  greater  expenditures 
in  raising  the  standards  of  housing  conditions,  as  evi- 
denced in  the  chapter  on  housing;  if  urban  power 
can  be  increased  through  educational  efficiency;  if  pub- 
lic service  enterprises  are  necessary  for  the  service  need- 
ed by  the  city  and  for  the  assurance  of  minimum  utility 
costs,  then  the  tax  rate,  in  so  far  as  it  reflects  wise  ex- 
penditures in  these  channels,  means  both  lower  costs 
now,  and  better  earning  power  and  better  living  costs 
under  more  wholesome  conditions  in  the  future. 

The  simple  fact  is  that  in  densely  populated  areas 
many  things  can  be  done  collectively  more  cheaply  and 
expeditiously  than  they  can  be  done  individually.  This 
simple  fact  accounts  for  the  increase  in  city  expendi- 

414,264. — Financial  Statistics  of  Cities  Having  a  Population  of 
Over  30,000,  1912,  p.  18. 

1  "The  Cost  of  Municipal  Government  in  Massachusetts" — 
Public  Document,  No.  79,  p.  xlviii,  published  in  1908. 


338  LOWER  LIVING  COSTS  IN  CITIES 

tures  in  the  past ;  it  will  account  for  the  rapid  growth  in 
collective  expenditures  in  the  future. 

Laissez  faire  and  its  companion  fear,  dread  of  gov- 
ernment, may  be  fitted  to  the  exploitation  of  the  forest 
and  the  prairie;  they  are  not  fitted  to  urban  conditions 
which  in  their  very  nature  make  for  the  exploitation  of 
men,  women  and  children.  Just  as  the  complexities 
of  urban  life  differ  from  the  simplicities  of  frontier 
life,  so  most  collective  activities  of  cities  and  the  expen- 
ditures therefor  differ  in  kind  and  degree  from  the  gov- 
ernmental activities  and  expenditures  of  frontier  town- 
ships. 

To  be  sure,  mere  size  of  expenditures  is  no  guarantee 
of  their  social  value.  Huge  sums  spent  on  boulevards 
for  some  favored  contractor  while  the  only  sewer  in 
some  sections  of  the  city  is  the  open  street  do  not  speak 
either  for  sanity  or  wisdom  in  public  expenditures.  This 
type  of  governmental  mismanagement  has  been,  and  un- 
happily still  is,  prevalent  in  the  public  business.  An 
efficiency  study  conducted  in  Chicago  showed  that  the 
day  laborers  work  40  per  cent,  of  their  time,  waste  46 
per  cent,  of  their  time,  the  balance  being  spent  in  wait- 
ing and  in  other  ways  not  counted  for.  The  loss  of  12 
per  cent,  of  the  time  of  Chicago's  street  cleaners  meant 
a  loss  of  $120,000  a  year;  a  loss  of  13.7  per  cent,  of  the 
time  of  ash  teams  was  equivalent  to  a  loss  of  $70,000 
per  year.  Again,  in  Chicago,  one  assignment  of  coal 
weighing  232,000  pounds  was  paid  for  three  times; 
while  bridge  houses  were  painted  at  costs  ranging  from 
five  to  seven  times  a  reasonable  amount.  Paving  repairs 
which  should  have  cost  $11.88  cost  $2,997.91.  Only 
62  per  cent,  of  gas-lamp  mantles  were  in  a  passable 
condition  and  only  20.2  per  cent,  in  good  condition.  A 
police  pension  fund  of  $600,000  was  drawing  no  interest, 
though  the  interest  should  have  amounted  to  $25,000 


TAXATION  339 

per  year.  Similar  examples  could  be  taken  from  the 
pages  of  many  another  city's  history. 

But  the  hopeful  sign  of  the  times  is  that  just  such 
useless  expenditures  are  being  exposed.  Throughout 
the  past  decade  there  has  been  a  widespread  revival  in 
applying  efficiency  principles  to  the  public  business. 

Throughout  the  country  certain  principles  have  been 
tried  and  found  ample  for  securing  and  assuring  effi- 
ciency in  administering  the  public  business.  No  longer 
need  it  be  said,  and  no  longer  can  it  be  said,  save  with 
the  exceptional  city,  that  a  dollar  of  public  moneys  buys 
but  thirty  or  forty  cents'  worth  in  actual  returns.  A 
dollar  of  the  public  moneys,  in  the  larger  number  of 
American  cities,  now  buys  as  much  as  the  money  of 
individuals;  and  in  many  cases  buys  more  than  the 
moneys  of  large  corporations. 

If  the  city  is  to  act  and  think  effectively,  it  must  have 
powers  adequate  to  its  needs.  One  of  the  first  princi- 
ples for  governmental  efficiency  in  cities,  therefore,  is 
home  rule. 

The  rule  as  to  the  powers  held  by  American  cities 
in  the  past  has  been  succinctly  stated  by  Judge  Dillon 
as  follows:  (i)  those  granted  in  express  words;  (2) 
those  necessarily  or  fairly  implied  in  or  incident  to  the 
powers  expressly  granted;  (3)  those  essential  to  the  de- 
clared objects  and  purposes  of  the  corporation — not 
simply  convenient  but  indispensable. 

The  rule  in  the  United  States  that  cities  have  only 
such  powers  as  it  pleases  the  state  legislatures  specifical- 
ly to  delegate  to  them  is  but  another  way  of  stating  that 
American  cities  must  look  for  decisions,  in  regard  to  the 
most  vital  of  their  governmental  matters,  to  their  state 
legislatures.  In  no  other  country  in  the  world  is  this 
rule  followed.  In  no  other  country  are  the  city's  most 
important  matters  determined  not  in  its  city  hall  but  in 


340  LOWER  LIVING  COSTS  IN  CITIES 

its  state  capitol.  Happily  the  people  in  nearly  one-third 
of  our  states  have  set  aside  this  American  ruling  by 
adopting  "home  rule"  provisions  in  their  constitu- 
tions.1 

The  courts  in  all  the  "home  rule"  states  have  inter- 
preted the  constitutional  amendments  granting  home 
rule  as  giving  to  the  municipality  full  and  complete 
powers  over  all  local  and  municipal  matters — all  pow- 
ers, indeed,  that  the  state  legislature  could  itself  ex- 
ercise in  the  field.  The  decisions  of  the  Colorado 
supreme  court  are  typical  as  to  what  the  supreme  courts 
of  other  states  are  deciding  as  to  the  powers  of  home 
rule  cities. 

Mr.  Justice  Steele,  in  speaking  for  the  Colorado  su- 
preme court  in  one  of  its  leading  home  rule  cases,  said: 
"The  amendment  is  to  be  considered  as  a  whole  in  view 
of  its  expressed  purpose  of  securing  to  the  people  of 
Denver  absolute  freedom  from  legislative  interference 
in  matters  of  local  concern."  In  a  more  recent  case, 
the  court  interpreted  the  purpose  of  the  home  rule 
amendment  to  be  "to  grant  home  rule  to  Denver  and 
the  other  municipalities  of  the  state,  and  it  was  intended 
to  enlarge  the  powers  beyond  those  usually  granted  by 
the  legislature.  ...  It  was  intended  to  confer  not 
only  the  powers  specially  mentioned,  but  to  bestow  upon 
the  people  of  Denver  every  power  possessed  by  the  legis- 
lature in  the  making  of  a  charter  for  Denver!'  "The 
test,"  said  Justice  Steele,  "is  whether  the  powers,  if  ex- 
ercised, will  promote  the  general  objects  and  purposes  of 
the  municipality  .  .  .  and  unless  it  clearly  appears  that 

*The  following  states  have  provisions  granting  home  rule  to 
cities  (1914)  :  Arizona,  California,  Colorado,  Michigan,  Minne- 
sota, Missouri,  Nebraska,  New  York,  Ohio,  Oklahoma,  Oregon, 
Texas,  Virginia,  and  Washington.  Maryland  will  vote  upon 
home  rule  within  the  present  year. 


TAXATION  341 

some  constitutional  provision  has  been  infringed,  the 
law  must  be  upheld." 

In  the  field  of  government,  as  in  the  animal  and  vege- 
table world,  form  must  be  adapted  to  function.  It  is 
the  recognition  of  this  basic  principle  that  constitutes 
the  second  great  force  in  the  current  vitalization  of  ur- 
ban government.  The  twentieth  century  city  inherited 
a  form  of  government  borrowed  from  that  devised  for 
the  national  government  under  social  and  economic  con- 
ditions widely  divergent  from  those  now  existing  in 
American  cities.  This  form  of  government,  with  its  two 
branches  of  councils,  its  independently  elected  officers 
and  its  independent  judiciary,  was  used  as  a  cloak  for 
partisan  mismanagement  and  for  countless  forms  of 
odious  graft. 

Cities  demand  administrative  efficiency  primarily. 
This  means  conspicuous  responsibility  for  officials  on 
the  one  hand  and  on  the  other  hand  a  simple  govern- 
mental structure  responsive  to  sustained  public  demands. 
Slowly  but  surely  a  new  form  of  government  suited  to 
these  needs  has  been  evolved,  first,  through  centraliza- 
tion of  power  in  the  mayor's  hands,  then  through  the 
creation  of  smaller  councils.  The  development  of  com- 
mission government  and  its  adoption  in  306  cities  with 
a  population  of  7,381,987,  and  now  the  development  of 
the  city  manager  idea  for  smaller  cities  and  mayoralty 
responsibility  for  all  appointments  in  larger  cities,  are 
giving  to  American  cities  a  form  of  government  suited 
to  their  functions. 

In  the  halcyon  days  of  graft  in  American  cities,  the 
budget  was  fixed  in  "star  chamber"  sittings  of  the  coun- 
cil; or,  more  probably  still,  the  council  was  called  upon 
to  ratify  blindly  a  budget  drawn  up  in  some  back  office 
where  ward  politicians  met  at  the  behest  of  those  still 
higher  in  partisan  power.  And  of  course  it  was  none 


342  LOWER  LIVING  COSTS  IN  CITIES 

of  the  citizens'  business  what  went  on  in  these  star  cham- 
ber meetings!  Was  not  the  council  chosen  to  act  for 
the  people? 

But  twentieth  century  urban  democracy  decrees  quite 
otherwise.  Standard  budget  forms  are  now  devised 
which  give  under  proper  classifications  and  under  unit 
costs  the  whole  story  of  expenditures  and  receipts.  Pub- 
lic officials  are  required  to  submit  their  budget  estimates 
in  ample  time  in  advance  of  the  official  budget,  sup- 
porting their  request  with  comparative  data  whenever 
possible  in  such  form  as  to  admit  of  intelligent  analysis. 
The  kind,  class,  quantity  and  probable  cost  of  supplies 
and  materials  must  be  estimated  in  detail.  Supplies 
must  be  itemized ;  inventories  set  forth ;  expenditures 
for  previous  years  set  down,  with  explanations  and  rea- 
sons for  any  requests  for  increases  therein.  An  inde- 
pendent detailed  investigation,  conducted  by  the  mayor, 
the  controller,  the  bureau  of  economy  and  efficiency, 
or  some  private  bureau  of  municipal  research,  checks 
up  the  receipts  and  expenditures  so  itemized.  Budget 
exhibits  and  displays  then  show  comparisons  between 
the  amounts  allotted  to  various  items.  The  citizen  is 
thus  informed  as  to  the  relative  amount  going  to 
flowers  for  boulevards  and  the  amount  going  to  nurses 
for  sick  children.  Then  follows  publicity,  and  op- 
portunities for  full  discussion  by  and  before  the 
council. 

The  want  of  uniformity  in  standards  has  been  another 
cloak  behind  which  have  been  hidden  literally  multitudes 
of  municipal  sins.  Shall  a  granite  street  curb  to  be  set 
in  concrete  be  twelve  or  twenty-two  inches  in  depth? 
If  "the  people"  do  not  know,  and  if  the  councils  do  not 
know,  and  if  there  are  no  standards  accepted  through 
the  country,  the  "contractor  friend"  will  have  no  diffi- 
culty in  getting  what  he  wants.  Through  want  of  stand- 


TAXATION  343 

ardization,  countless  scores  of  miles  of  useless  cement 
are  lying  in  the  ground  in  all  our  largest  cities. 

The  testing  laboratory  is  being  used  in  New  York 
City  and  other  places  to  test  materials  and  supplies  to 
make  sure  that  they  come  up  to  the  standards  specified. 
Specifications  are  no  longer  being  drawn  carelessly  or  in 
a  way  that  will  shut  out  all  bidders  save  the  favored 
one.  Even  stationery  is  being  standardized  so  that  no 
longer  is  the  same  department  using  numerous  forms 
and  sizes  of  stationery,  blanks,  etc.,  to  the  added  burden 
of  the  taxpayer.  Time  records  are  being  kept  as  to  the 
work  of  city  employees,  not  as  a  "humiliation,"  but  in 
order  to  ascertain  with  accuracy  the  exact  amount  of 
time  necessary  to  do  a  given  piece  of  work,  in  order 
that  accurate  estimates  may  be  made  therefor.  Ac- 
counting systems  are  being  standardized  so  that  complete 
control  is  kept  over  all  appropriations  and  expenditures. 
Divisions  of  cost  and  statistics  are  collecting  and  tabu- 
lating the  facts  and  data  pertaining  to  the  various  activi- 
ties of  the  city  on  a  unit  cost  basis,  so  that  the  efficiency 
of  one  department  can  be  compared  with  the  efficiency 
of  other  departments  in  the  same  city  or  with  similar 
departments  in  other  cities. 

The  fourth  factor  in  efficiency  in  administering  the 
public  business  is,  therefore,  summarized  in  the  word 
standardization.  Bountiful,  indeed,  have  been  its  fruits, 
despite  its  scant  half  dozen  years  of  life  in  the  light. 

Most  difficult  of  all  problems  of  urban  efficiency 
is  to  get  an  efficient  personnel  on  the  public  staff.  A 
comparative  study  of  efficiency  and  municipal  labor 
in  New  York  City  and  Chicago  was  made  by  Benjamin 
F.  Welton,  engineer  in  charge  of  the  Bureau  of  Efficiency 
in  the  office  of  the  Commissioner  of  Accounts,  New  York 
City.  Mr.  Welton  states  that  these  municipalities  "nor- 
mally suffered  a  loss  of  efficiency  in  the  forces  examined 


344  LOWER  LIVING  COSTS  IN  CITIES 

varying  from  40  per  cent,  to  70  per  cent  This,  of  course, 
represented  virtually  nothing  except  wasted  time.  While 
these  investigations  covered  only  a  relatively  small  por- 
tion of  the  total  labor  employed  in  all  departments  of 
either  city,  it  may  be  stated  with  the  utmost  assurance 
that  the  average  efficiency  of  labor  in  any  large  munici- 
pality will  not  at  the  present  time  exceed  50  per  cent. 
.  .  .  The  annual  labor  payroll  of  New  York  City  ap- 
proximates $17,000,000.  A  loss  in  efficiency  of  50  per 
cent,  means,  therefore,  a  yearly  waste  of  $8,500,000."  1 

This  inefficiency  in  municipal  labor  Mr.  Welton  ac- 
counts for  through:  "(i)  Inefficiency  in  the  supply, 
distribution  and  use  of  material,  plant  and  equip- 
ment. (2)  Inefficiency  due  to  lack  of  knowledge  con- 
cerning work  conditions  and  requirements.  (3)  Ineffi- 
ciency due  to  lack  of  predetermination  in  the  assign- 
ment of  work;  (4)  Inefficiency  due  to  improper  organi- 
zation of  force.  (5)  Inefficiency  due  to  improper  meth- 
ods and  unsystematic  procedure.  (6)  Inefficiency  due 
to  lack  of  discipline.  (7)  Inefficiency  due  to  lack  of 
standards  by  which  performance  may  be  judged.  (8) 
Inefficiency  due  to  inadequate  and  inaccurate  records  of 
performance  and  conduct."  2 

A  continuing  cause  of  this  municipal  inefficiency  is  the 
all  too  prevalent  use  made  of  the  contracting  system  for 
cleaning  streets,  collecting  garbage,  paving  streets  and 
similar  urban  work.  The  relations  between  contractors 
and  city  government  have,  as  a  rule,  been  unsavory. 
They  give  no  promise  of  being  any  other  way  in  the  fu- 
ture. The  solution  is  direct  control  and  operation  by 
the  city. 

Benjamin  F.  Welton:  "The  Problem  of  Securing  Efficiency 
in  Municipal  Labor." — The  Annals  of  the  American  Academy  of 
Political  and  Social  Science,  May,  1912,  p.  104. 

'Ibid.,  p.  109. 


LOWER  UTILITY  COSTS  345 

Nor  are  the  means  and  agencies  wanting  for  secur- 
ing efficiency  in  the  personnel  of  the  city's  public  staff. 
Scientific  management  has  worked  out  the  following 
four  principles  for  securing  efficiency  in  industrial 
plants:  (i)  "Science,  not  rule  of  thumb."  (2)  "Har- 
mony, not  discord."  (3)  "Cooperation,  not  individual- 
ism." (4)  "Maximum  output,  not  restricted  output." 1 
These  four  principles  can  be  reshaped  to  fit  munici- 
pal functions  as  follows:  (i)  There  must  be  con- 
spicuous responsibility;  (2)  organization  of  work 
must  be  on  functional  lines;  (3)  there  must  be 
scientific  selection  of  workmen;  and  (4)  there  must 
be  motive  for  continuous  service  on  an  efficiency 
basis. 

Conspicuous  responsibility  is  being  secured  through 
the  commission  plan,  the  city  manager  plan  and  the 
plan  for  centralizing  administrative  power  in  the  mayor 
with  small,  elective  unicameral  councils,  in  larger  cities. 
A  very  interesting  illustration  of  this  principle  has  been 
made  recently  by  the  Director  of  the  Department  of 
Public  Works  in  the  city  of  Philadelphia,  who  got  out  a 
"Guide  to  Complaints,"  informing  the  public  definitely 
the  person  to  whom  to  go  with  complaints.  Organiza- 
tion along  functional  lines  scarce  needs  illustration  here. 
The  centralization  of  work  pertaining  to  the  paymas- 
ter's office,  the  centralization  of  the  various  city  activi- 
ties in  a  bureau  particularly  suited  to  that  function  rather 
than  scattering  varied  functions  throughout  each  of  the 
bureaus  are  all  leading  to  a  more  efficient  and  expert 
public  staff.  Even  the  planning  room,  once  the  laughing- 
stock, now  the  hope  of  the  manufacturer  and  of  the 
man  in  big  business,  is  finding  a  place  in  city  halls.  The 
commission  government  in  Trenton  has  recently  adopted 
a  school  of  instruction  for  policemen  in  order  that  the 

1  Taylor :    "Principles  of  Scientific  Management,"  p.  140. 


346  LOWER  LIVING  COSTS  IN  CITIES 

police  may  be  taught  the  city's  ordinances  and  be  made 
efficient  in  administering  their  inspection  work. 

The  following  general  principles  are  fundamental  in 
the  selection  and  appointment  of  experts:  (i)  Such 
experts  must  have  a  sufficient  equipment  in  mental  stock 
and  training  to  enable  them  to  cope  with  their  special 
problems  without  undue  waste  of  time  and  the  public 
moneys;  (2)  there  is  like  need  for  experience  and  com- 
mon-sense to  give  practicability  to  their  plans,  methods, 
and  suggestions;  (3)  of  special  importance  is  a  high 
sense  of  social  and  public  responsibility;  (4)  to  prevent 
inbreeding  and  to  give  comprehensiveness  of  vision, 
there  must  be  a  national  supply  of  experts  available  to 
each  and  every  kind  of  governmental  service;  (5)  to 
get  results,  to  prevent  duplication,  to  secure  economy  in 
government,  there  must  be  unity  and  cooperation  among 
all  the  officials  of  the  city,  the  state  or  the  nation;  (6) 
the  work,  methods  and  results  of  experts  and  other  gov- 
ernment officials  must  be  checked  up  with  a  view  toward 
creating  national  standards  in  efficiency  and  competence.1 

There  are  many  urgent  reasons  why  there  should  be 
no  residence  limitations  upon  engineers,  bureau  chiefs 
and  all  those  in  expert  service.  One  of  these  is  that 
local  opposition  to  "aliens"  is  based  at  times  on  the 
knowledge  that  the  local  expert  is  amenable  to  social 
and  economic  pressure  that  will  tend  to  make  him  "safe 
and  sane,"  in  other  words,  often,  dishonest.  And  if 
faith  in  the  expert  is  to  develop,  all  taint  of  dishonesty 
or  amenability  to  "pressure"  must  be  eliminated.  A 
second  equally  poignant  reason  for  no  residence  limita'- 
tion  on  experts  for  governmental  service  is  that  the 
honesty,  efficiency  and  competent  standards  of  experts 

*See  National  Municipal  Review,  April,  1914,  p.  304,  for  a 
discussion  by  the  author  on  "The  Appointment  and  Selection  of 
Government  Experts." 


TAXATION  347 

will  best  be  furthered  by  the  creation  of  a  national  sup- 
ply of  such  experts  to  the  end  that  evidence  of  "taint" 
will  reflect  on  the  expert's  standing  among  his  associates. 
This  is  a  factor  of  no  small  importance  in  developing 
a  class  of  experts  in  whom  the  public  can  have  a  right- 
eous faith. 

The  department  chief  must  be  clearly  held  responsible. 
Responsibility  cannot  be  fixed  if  he  cannot  choose  his 
own  expert.  "Soldiering"  must  be  done  away  with.  No 
competent  governmental  chief  will  tolerate  such  a  situa- 
tion as  has  existed  in  a  certain  city  familiar  to  the  author 
where  all  the  work  done  in  a  bureau  whose  total  appro- 
priation for  salaries  was  $10,000  was  done  by  a  man  re- 
ceiving a  salary  of  $900.  Essential  to  efficiency  is  co- 
ordination in  all  the  governmental  departments.  For 
instance,  the  city's  health,  clean  streets,  an  efficient 
market  policy,  all  require  responsive,  well  correlated 
work.  To  secure  such  work  there  must  be  an  esprit  de 
corps  among  officials,  born  only  of  unity  and  a  desire  to 
succeed.  This  can  never  be  attained  where  the  respon- 
sible individual  does  not  have  the  power  to  appoint  and 
to  remove  his  subordinates. 

And,  finally,  effective  government  hinges  on  an  effec- 
tive citizenry.  An  effective  citizenry  is  an  informed  citi- 
zenry— informed  through  simple  but  adequate  and  in- 
clusive reports  by  public  officials  and  through  the  crit- 
ical studies  of  bureaus  of  research,  and  public  bureaus 
of  economy  and  efficiency,  a  citizenry  alert  to  commu- 
nity needs,  and  responsive  to  the  advantages  of  com- 
munity action,  a  citizenry  that  can  see  over  the  clasp  of 
the  pocketbook  to  an  understanding  and  sympathy  of 
others. 

"The  great  problem  is  to  make  the  government  of  a 
city  human.  .  .  .  We  may  have  efficient  governments 
in  our  cities,  and  honest  governments,  as  we  are  begin- 


348  LOWER  LIVING  COSTS  IN  CITIES 

ning  to  have  everywhere,  and,  happily,  are  more  and 
more  to  have,  but  the  great  emancipations  will  not 
come  through  the  formulae  of  independents,  socialists,  or 
single-taxers,  nor  through  law  and  order  leagues,  nor 
civic  associations.  Down  in  their  hearts  these  are  not 
what  the  people  want.  What  they  want  is  a  life  that  is 
fuller,  more  beautiful,  more  splendid  and,  above  all, 
more  human.  And  nobody  can  prepare  it  and  hand  it 
over  to  them.  They  must  get  it  themselves;  it  must 
come  up  through  them  and  out  of  them,  through  long 
and  toilsome  processes  of  development;  for  such  is 
democracy." 1 

Urban  living  costs  are  what  we  make  them.  To  a 
large  extent,  they  are  the  result  of  community  ineffi- 
ciency. Minimum  living  costs,  particularly  in  densely 
populated  centers,  must  mean  social  foresight  and  so- 
cial efficiency  and  virility  in  public  action,  to  the  end 
that  useless  costs  may  be  eliminated  and  sane,  effective 
programs  for  social  efficiency  be  carried  into  execution. 
The  future,  as  to  living  costs,  will  depend  largely  upon 
the  individual's  initiative  in  increasing  his  own  produc- 
tive power,  individual  sanity  in  making  standards  and 
income  meet,  and  individual  perseverance  and  effective- 
ness in  securing  virile  and  wholesome  community  and 
social  action. 

*Whitlock:  "Forty  Years  of  It,"  pp.  204-5. 


INDEX 


Abattoirs,  in  Europe  and  the 
United  States,  134-136 

Auction,  sale  by,  61,  62,  116- 
118,  122 

Chain  stores,  direct  buying 
by,  94;  in  Philadelphia, 
70-72;  standard  of  prices 
set  by,  83 

Cheese,  marketing  of,  in 
Wisconsin,  22 

Chicago  Board  of  Trade, 
membership  of,  52 

Children,  medical  inspection 
of  school,  201 

Cities,  centering  of  respon- 
sibility in,  345 ;  demand  for 
efficiency  in,  341;  differ- 
ence between  twentieth 
century  and  nineteenth 
century  villages,  i,  2;  food 
for,  12-15;  powers  of,  339 

City  planning,  relation  be- 
tween, and  housing,  261; 
relation  between,  and  pub- 
lic utilities,  262-263;  zone 
system  in,  261 

Cleveland,  building  of  homes 
at  public  expense  in,  254 

Cold  storage,  advantages  of, 
41,  42;  charges  for,  38,  39; 


effect  of,  on  prices,  37- 
43 ;  number  of,  warehouses 
in  the  United  States,  38; 
time  of  produce  in,  43; 
wholesomeness  of  food  in, 
78-80 

Commission  merchants, 
books  to  be  kept  by,  67; 
commissions  of,  fixed  by 
produce  exchanges,  53 ; 
embezzlement  by,  64,  65; 
functions  of,  52;  license  to 
be  taken  out  by,  66;  state 
regulation  of,  63,  64,  68 

Congestion,  in  cities,  238-239 

Consumers,  shorter  route 
from  producers  to,  90-96 

Consumers'  cooperation,  ac- 
complishments of,  158-172; 
advantages  of,  86;  in  the 
United  States  and  Europe, 
158,  168-169;  tendency 
toward,  94,  95 

Consumers'  prices,  manufac- 
turers' agreements  and,  85 

Cooke,  Morris  Llewellyn,  on 
unemployment,  266,  267 

Cooperation,  advantages  of, 
in  densely  populated  areas, 
10 ;  among  consumers,  86, 
94,  95,  158-172;  among 


349 


350 


INDEX 


producers,    140146 ;    atti- 
tude    toward,     2;     waste 
through  lack  of,  9 
Cooperative  associations,  146, 

153 
Cooperative    stores,    in    the 

United  States  and  Europe, 

159-161 
Country  buyer,  functions  of, 

18,  50 
Crop    reports,    national    and 

international,  43,  44 
Curbstone  markets,  in  Amer- 
ica and  Europe,  122,  125- 

127 

Department  of  Agriculture, 
crop  reporting  in,  43 

Direct  marketing,  extension 
of,  113,  139;  results  of,  92, 

193 

Disease,  cost  of,  to  people  of 
the  United  States,  182-185 ; 
preventability  of,  187-190 

Distribution,  better  agencies 
for  local,  98-109;  costs  of, 
16-26,  59,  86;  inefficiency 
of  existing  agencies  for 
local,  98;  lowering  costs 
incident  to,  59,  86;  proc- 
ess of,  18-20,  57 

Education,  democratization 
of  higher,  299-303;  effect 
of,  on  wages,  275 ;  reorgan- 
ization of,  282,  287,  293- 
299;  expenditures  for,  271- 
272 


Eggs,  marketing  of,  91 ;  value 
of,  in  the  United  States, 

25 

Electric  companies,  capitali- 
zation of,  307 

Employment,  reduction  of 
non-,  265-267 

Express,  as  agency  for  dis- 
tribution, 137 

Farm  credit  system,  in  the 
United  States,  153 

Farmers,  use  of  markets  by, 
123-124 

Food  bureau  costs,  a  city  pro- 
gram for  lower,  173-181; 
rise  in,  during  process  of 
distribution,  15,  19-21 

Food  bureau  supply,  diver- 
sity in,  12-15 

Food  bureaus,  activities  of 
city,  state  and  national, 

77 

Foods,  adulteration  and  de- 
terioration of,  73;  amounts 
of,  shipped  each  year,  55, 
56;  change  in  routing  of, 
57 ;  municipal  inspection 
of,  120;  wholesale  prices 
of,  27 

Forestalling,  practiced  by  re- 
tailers, 81 

Freight  transportation,  re- 
ceipts from,  in  the  United 
States,  28 

German  cities,  contrast  be- 
tween, and  American  cities 


INDEX 


351 


in  the  assurance  of  mini- 
mum living  costs,  8 

Germany,  development  of 
terminal  facilities  in,  8 

Governmental  expenditures, 
purposes  for  which  made, 

337 

Grain,  marketing  of,  24 
Grocery     stores,     type     and 

number  of,  in  Philadelphia, 

70-71 

Hamper,  as  a  means  of  direct 
marketing,  138 

Health  bureaus,  activities  of 
city,  state  and  national,  77 

Health  conservation, 
amounts  expended  on,  193, 
195;  carelessness  in,  216; 
effect  of  environment  on, 
215;  productivity  through, 
182-216 

Holding  companies,  advan- 
tages of,  316-318;  services 
by,  3H 

Home  rule,  as  part  of  gov- 
ernmental efficiency,  339 ; 
extent  of,  340 

Houses,  building  of,  at  pub- 
lic expense  in  Cleveland, 
254;  means  of  encourag- 
ing ownership  of,  267-269; 
public  ownership  and  op- 
eration of,  253 

Housewives'  leagues,  work 
of,  88-89 

Housing,  accomplishments 
of  legislation  for,  250- 


251 ;  conditions  of,  237, 
239;  costs  of,  243-248;  ele- 
ments in  a  constructive 
program  for,  237;  problem 
of,  250;  relation  between, 
and  city  planning,  26;  .re- 
lation between,  and  mor- 
tality rate,  240;  regulations 
for,  248-252 ;  standards  for, 
249 
Hucksters,  function  of,  18 

Illinois,  rules  prescribed  by 
Railroad  Commission  of, 

63 

Industrial  commission,  crea- 
tion of,  85,  87 

Infants,  mortality  rate  of, 
207 

Jobbers,  functions  of,  51 

Land,    public    ownership    of, 

257-258 
Land   credit,   in   the   United 

States  and  Europe,  149-151 
Land  values,  control  of,  255, 

257;  increase  in,  255 

Market  bureaus,  duties  of, 
178-180;  producers  coop- 
eration and,  155 

Marketing,  American  sys- 
tem of,  15;  by  express,  137; 
changes  in  method  of,  90- 
91,  140;  costs  of,  99 

Markets,  adaptation  of  local 
products  to,  112-113;  ad- 


352 


INDEX 


ministration  of,  128;  arti- 
cles for  sale  in,  131 ;  low 
stall  rentals  in,  129;  use  of, 
by  farmers,  124.  See  also 
Municipal  Markets,  Retail 
Markets,  Open-air  Mar- 
kets, Terminal  Markets 

Middlemen,  49-69 ;  abuses 
practiced  among,  60,  61 ; 
functions  of,  18,  20,  50-52, 
55;  necessity  of,  in  pres- 
ent marketing  system,  56 

Milk,  control  of  supply  of, 
212;  purity  of  supply  of, 
208-209 ;  standards  for,  21 1 

Minneapolis,  chamber  of 
commerce  in,  52 

Misbranding,     practice      of, 

73,78 

Motor  trucks,  as  agency  for 
distribution,  101,  107-109 

Municipal  enterprises,  atti- 
tude toward,  in  twentieth 
century  city,  2,  3 

Municipal  markets,  advan- 
tages of,  130;  economies 
effected  through,  119;  fa- 
cilities for  stall  renters  in, 
129;  in  the  United  States, 
114-115;  profits  derived 
from,  129;  purposes  of, 
128;  results  secured  by, 
131-132;  use  of,  by  farm- 
ers, 123 

Municipal  slaughter-houses, 
establishment  and  opera- 
tion of,  134;  in  Europe, 
134-135 


New    Jersey,    weights    and 

measures  in,  75 
New  York,  distribution  costs 

in,    17,    21 ;    weights    and 

measures  in,  75 

Open-air  markets,  in  Amer- 
ica and  Europe,  122,  125- 
127 

Parcels  post,  as  agency  for 
distribution,  101,  137,  138 

Pennsylvania,  use  of  markets 
by  farmers  in,  124 

Philadelphia,  distribution 
costs  in,  17-19;  grocery 
stores  in,  70-71 

Population,  decentralization 
of  city,  264;  growth  in  ur- 
ban, 9;  percentages  of,  in 
city  and  country,  3,  4,  237 

Price  agreements,  making  of, 
by  retailers,  83 

Prices,  controllable  elements 
in  retail,  70-89;  effect  of 
cold  storage  on,  37-43;  ef- 
fect of  tariff  on,  36-37; 
enhancement  of,  at  each 
step  in  process  of  distribu- 
tion, 23;  forces  fixing 
wholesale,  27-48;  increase 
in,  of  main  food  articles, 
7;  stability  in,  13,  27,  36- 

37,  45,  54 
Produce,    cost    of    hauling, 

32 

Produce  exchanges,  commis- 
sions of  members  fixed  by, 


INDEX 


353 


53;    duties   performed   by, 

52-54 

Producers,  packing  and  sort- 
ing by,  74;  practices  of, 
6 1 ;  shorter  route  from,  to 
consumers,  90-96 

Producers'  cooperation,  ad- 
vantages of,  86;  furthering 
of,  through  market  bu- 
reaus, 155;  standardization 
and  efficient  marketing 
through,  57,  140-156;  sub- 
sidizing of,  155 

Producers'  cooperative  so- 
cieties in  the  United  States, 

154 

Producers'  price  current,  fix- 
ing of,  61-62 

Public  ownership,  as  a  means 
of  lowering  prices,  87; 
tendency  towards,  334 

Public  ownership  utilities, 
capital  invested  in,  305- 
308;  relation  between,  and 
city  planning,  262-263 

Publicity,  as  to  wholesale  and 
retail  conditions,  178 

Pure  food  laws,  amounts  ex- 
pended by  states  and  cities 
in  enforcing,  76 

Railways,  capital  invested  in, 

305 
Real  estate,  valuations  of,  8, 

256 
Recreation,  costs  of,  226-227; 

costs  of  lands  for,  232-233 ; 

expenditures  for,  227;  lack 


of,  and  juvenile  offenses, 
219;  necessity  for,  218, 
222;  opportunity  for,  in 
Philadelphia,  229-231 ;  pro- 
ductive power  through, 
220;  schools  as  centers  of, 
303;  types  of,  222-223;  vi- 
tality through,  218-236 

Refrigeration,  proper  use  of, 
39,  96 

Retail  markets,  adaptation  of, 
to  movements  of  popula- 
tion and  to  city  needs,  122- 
123;  need  for,  122 

Retailers,  abuses  and  prac- 
tices of,  73 ;  as  part  of  dis- 
tribution system,  20;  func- 
tions of,  52;  misbranding 
practiced  by,  73 

Roads,  as  agency  for  distri- 
bution, 101 ;  development 
of  good  inter-county,  106 

St.  Louis  exchange,  member- 
ship of,  51 

Sanitation,  as  factor  in  pro- 
ductive power,  198;  ex- 
penditures for,  199-201 

Schools,  activities  of  modern, 
288;  as  factor  in  health 
conservation,  204;  as  rec- 
reation centers,  235,  303; 
reorganization  of,  282,  287, 
293-299;  various  kinds  of, 
289-292 

Scientific  management,  prin- 
ciples of,  345 

Selling  at  home,  advantages 


354 


INDEX 


of,  15,  112;  effects  of,  112; 
facilities   for,    1 1 1 ;   lower- 
ing   of    distribution    costs 
through,  99 
Selling  in  transit,  advantages 

of,  45-46 

Shipments,  diversion  of,  45 
Specialization,   effect   of   di- 
versity of  food  supply  on, 

14 

Standardization,  importance 
of  better,  to  the  farmer, 
68;  in  grading  and  pack- 
ing, 143;  necessity  of,  for 
more  direct  routing  of 
food,  57;  of  products,  144; 
results  of,  145;  securing  of, 
57,  140,  156 

State  supervision,  as  a  means 
of  abating  abuses  in  com- 
mission business,  63 

Tariff,  effect  of,  on  living 
costs,  36-37 

Tax,  objection  to,  on  un- 
earned increment,  260 

Taxation,  governmental  effi- 
ciency and,  336-348;  kinds 
of,  257 

Terminal  facilities,  in  Ger- 
many, 8;  left  to  private 
control  and  initiative,  8; 
necessity  of  improving,  59 

Terminal  markets,  auction 
departments  in,  117,  118; 
economies  effected  through, 
121 ;  in  Europe,  116;  need 
of,  in  the  United  States, 


116-117;  wholesale,  117, 
118,  121 

Transit,  advantages  of  sell- 
ing in,  45,  46 

Transportation,  cost  of,  321 ; 
weakness  in  system  of, 

173 

Trolley  freight,  advantages 
of,  102-103;  as  a  means  of 
retail  distribution,  101, 
105-106;  revenues  from, 
104 

Urban  costs,  factors  in,  4-5 
Urban    population,    increase 

in,  no 

Utility  costs,  lower,  305-335 
Utility  program,  elements  in 

a  constructive,  320-335 

Valuations,  fixed  by  certain 

public  service  commissions, 

312-313 
Vitality,  effect  of  recreation 

on,  218-236;  relation  of,  to 

fatigue,  214 

Wage-earners,  annual  income 

of,  5;  food  costs  of,   16; 

living  costs  of,  6. 
Wages,    effect   of   education 

on,  275 
Waterfronts,  control  of,  173- 

174;   lack  of  development 

of,  8 
Water  terminals,  inadequacy 

of,  173-174 
Water  transportation,  devel- 


INDEX 


355 


opment  of,  106;  low  rate 
of,  30 

Wealth,  readjustment  in  dis- 
tribution of,  9,  10 

Weights  and  measures,  dis- 
honest, 73;  in  New  Jersey, 
New  York  and  Pittsburgh, 

75 

Wholesale  cooperative  socie- 
ties in  Europe,  164,  167 

Wholesale  prices,  fluidity  and 


acceleration  in,  27,  45 ;  uni- 
formity in,  26,  27 

Wholesale  markets,  bulletins 
published  by>  120-121 ; 
economies  effected  through, 
121 ;  sale  by  auction  in, 
117-118 

Wholesale  receiver,  func- 
tions of,  50 

Wisconsin,  marketing  of 
cheese  in,  22 


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